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November 29, 2007

EA boss calls in-game ad revenue forecasts 'wildly high'

Posted by Benjamin J. Romano at 3:53 PM

I'm thinking Alex St. John over at Wild Tangent would agree wholeheartedly with John Riccitiello, CEO of Electronic Arts, the biggest video game publisher, who said today:

"You can't be as bullish as analysts are on in-game advertising and be sane," he said. "In-game ad expectations are wildly high."

One widely reported forecast by the Yankee Group has in-game ad revenue reaching $971 million by 2011 up from just $77.7 million last year.

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Riccitiello's comments came in an interview with Dow Jones.

Microsoft, for one, has been particularly bullish on in-game advertising, acquiring the Massive Network for as much as $400 million, according to unconfirmed reports, last year. Here's an in-depth look at Massive's business from earlier this year.

That deal and others helped build hype around the nascent in-game ad business, Riccitiello told Dow Jones. EA, which controls several top titles in the sports category that advertising leaders say are a natural fit for in-game promotions, is cranking out about $30 million a year from in-game ads -- a small slice of total revenue.

I spoke with St. John earlier this month. He says in-game advertising is much less efficient than other options his company offers in the category of around-game advertising. Particularly for casual games, more flexible models are working better at Wild Tangent. Some examples include giving advertisers the opportunity to sponsor game play sessions; and giving players the choice of viewing a short pre-roll ad while a game is loading, or paying for the game session.

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Tricia Duryee
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