8. Agenda
1. Why Advertise in Video Games?
2. Overview of the Video Game Industry
3. Advertising Opportunities in Video Games
4. Next Steps for Havas
8
9. Why Advertise in Video Games?
Immersed audiences
Wide reach: men, women, teens, adults
Find new customers
Reach existing customers in new and
imaginative ways
Opportunities for co-branding
Various formats allow reach in different
demographics, with different cost structures
9
10. The new face of the gamer
More this…
Less this…
The Nintendo Wii
has consistently
been at the top of
the Amazon.com
wedding registry
in 2007
10
11. An Uncluttered Opportunity
70,00 3:50
66
3:20
3:21
60,00
2:39 2:52
50,00
44.8
2:24
2003 40,00 Average
Advertising Media Time
1:55
Revenue Spent/Day
(In Millions) 30,00 (HH:MM)
1:26
1:09
19.1 1:03
20,00
0:57
10,00 8.5
0:28
0:38
0,03
0,00 0:00
TV Newspaper Radio Internet Games
Source: Arbitron, Television Bureau of Advertising, Entertainment Software Association and Yankee Group, 2005 11
12. Agenda
1. Why Advertise in Video Games?
2. Overview of the Video Game Industry
3. Advertising Opportunities in Video Games
4. Next Steps for Havas
12
13. Video Games in Entertainment
• Video games are now a mainstream entertainment
Video
Games medium
• 40% of US households have a video game console system
• 120 million people play video or computer games in the US
vs • 2006 US video game sales reached $12.6 Billion, up 19% from 2005
FILM • US Box office was only $9.5 Billion in 2006
vs • Video game revenues grew 28.4% from 2006-2007
MUSIC • Music revenues dropped an estimated 10% over the same period
• From 2004 to 2006, number of U.S. households with
vs televisions that also have video game consoles rose from 38.6
TV million to 45.7 million. (18.5% increase)
• Total number of U.S. households with televisions rose only 1.6
percent over the same timespan.
Source: NPD, ESA, RIAA, MPAA, Nielsen 13
14. Who is Playing? – US Gamers
• 69% of American heads of households play computer or video
games
• The average game player is 33 years old
• In 2005, 25% of gamers were over the age of 50
• Women age 18 or older represent 30% of the game-playing
population, versus 23% boys age 17 or younger
Source: Entertainment Software Association, 2006 14
15. Who is Playing? – European Gamers
• 66.7 million active gamers (23.2% of the total population)
• Germany the largest core European market* in absolute terms
• 28% of males and 19% of females (over 5 years old) are active
gamers
• Female gamers are up 25% year-on-year
Source: GameVision, European Consumer intelligence Report, Spring 07
Sample 11,894 across UK, France, Germany, Italy , Spain; weighted to 2007 population census data)
* European countries included are: UK, France, Germany, Italy , Spain 15
16. Two Broad Categories
Casual Games Core Games
• Easy to learn, with simple gameplay, • Highly immersive,with deep and
Description graphics and rules extended gameplay and high quality
• Fun to play, often addictive graphics and sound
• 5 – 20 minutes per session • Gameplay sessions typically last 90
Gameplay Length • Can be played in a series of short minutes
bursts, during work breaks or on •Gamers are typically completely
public transportation immersed in the world of the game
• Online or downloadable web-based • Games are purchased either online
Method of Play Flash games or at retail
• May be passed along to other users • Require powerful, high quality
and spread virally computer or dedicated console
Main Demographic • Targeted at mass audience
• 60% are women, most age 35+ • 80% are male, age 18-34
• Typically free to play, though pay-to- • $30 - $70 per game at retail
Cost to Consumer
play models do exist
• Solitaire, Sudoku, Mahjong, Tetris, • Electronic Arts, Nintendo, Microsoft,
Examples Extreme Pamplona, Gilette Jetski Activision Blizzard, Ubisoft, Take Two
Source: Interactive Advertising Bureau: Game Advertising Platform Status Report, Oct 2007 16
17. A MultiPlatform Marketplace
Console and Handheld
Games
PC Core Games
PC Casual Games
PC Virtual worlds
Mobile Games
17
18. A MultiPlatform Marketplace
1 - Console and Handheld Games
Console and Handheld Games
Game consoles linked to TV sets through
Platform audio/video cables, increasingly internet-ready,
Description and dedicated handheld consoles
68% M / 32% F
Consumer Median Age – 26
Profiles 38% of most frequent console gamers are under
18
70% of software shipments are for TV Based
Key Gaming Consoles, 10% for handheld devices
Market XBox360 and Wii lead next generation console
Stats sales, but Sony´s PS2 continues to have strong
sales
Major Sony: PlayStation PS2 / PS3 / PSP
Players Microsoft: Xbox / Xbox 360
Nintendo: GameCube / Wii / DS / GBA
Action 30.1 %
Top Title
Sports 17.8 %
Categories
Shooters 9.6 %
Children/Family 9.5 %
Racing 9.4 %
Increased presence as center of digital
Trends to home/entertainment hub
Watch Increased online connectivity
Xbox Live now close to 8 Million
Source: Entertainment Software Association, NPD 18
19. A MultiPlatform Marketplace
1 - Console and Handheld Games
Console Producers Fixed Consoles Handheld Devices
Wii Gamecube DS Gameboy Advance
Playstation 3 Playstation 2 PSP – PlayStation Portable
XBox 360 XBox
19
20. A MultiPlatform Marketplace
1 - Console and Handheld Games
CONSOLE HARDWARE SALES - 2006
Unit Dollar
Unit Share Dollar Share
Platform Volume (%) Volume (%)
GameCube 756.656 6,5 $72.910.750 2,5
PlayStation 2 4.713.323 40,8 $628.404.300 21,3
PlayStation 3 687.256 5,9 $396.174.100 13,4
Wii 1.080.310 9,3 $268.850.500 9,1
GameCube PS2
PS3 Wii
Xbox 391.876 3,4 $67.778.070 2,3 Xbox Xbox 360
Other
Xbox 360 3.927.195 34 $1.512.159.000 51,3
All Other 8.700 0,1 $526.823 0
Source: NPD, 2006 20
21. A MultiPlatform Marketplace
1 - Console and Handheld Games
CONSOLE SOFTWARE SALES - 2006
Unit Dollar
Unit Share Dollar Share
Platform Volume (%) Volume (%)
GameCube 17.198.750 12,4 $481.843.900 10,1
PlayStation 2 73.477.660 53,1 $2.303.179.000 48,4
PlayStation 3 1.275.378 0,9 $75.171.730 1,6
Wii 2.994.592 2,2 $145.262.500 3,1
GameCube PS2
PS3 Wii
Xbox 22.242.080 16,1 $603.749.800 12,7 Xbox Xbox360
Other
Xbox 360 20.822.900 15 $1.148.104.000 24,1
All Other 411.703 0,3 $4.783.447 0,1
Source: NPD, 2006 21
22. Bestselling Video Game Titles of 2007 (US)
1 2 3 4 5
HALO 3 SUPER MARIO GALAXY
WII PLAY(WITH REMOTE) CALL OF DUTY 4 GUITAR HERO III
Platform: Xbox 360 Platform: Nintendo Wii
Platform: Nintendo Wii Platform: Xbox 360 Platform: PlayStation 2
Genre: Action Genre: Action
Genre: Casual / Arcade Genre: Action Genre: Music
Publisher: Microsoft Publisher: Nintendo
Publisher: Nintendo Publisher: Activision Publisher: Activision
Developer: Bungie Developer: Nintendo
Developer: Nintendo Developer: Infinity Ward Developer: Harmonix
Rated “M” for Mature Rated "E" for Everyone
Rated "E" for Everyone Rated “M” for Mature Rated “T” for Teen
Released: September 2007 Released: November 2007
Released: February 2007 Released: November 2007 Released: October 2007
Copies sold: 4.82 million Copies sold: 2.52 million
Copies sold: 4.12 million Copies sold: 3 million Copies sold: 2.7 million
6 7 8 9 10
POKEMON DIAMOND MADDEN NFL 08 GUITAR HERO II ASSASSIN´S CREED MARIO PARTY 8
Platform: Nintendo DS Platform: PlayStation 2 Platform: PlayStation 2 Platform: Xbox 360 Platform: Nintendo Wii
Genre: Adventure Genre: Sports Genre: Music Genre: Action Genre: Arcade
Publisher: Nintendo Publisher: Electronic Arts Publisher: Activision Publisher: Ubisoft Publisher: Nintendo
Developer: Nintendo Developer: EA Sports Developer: Harmonix Developer: Ubisoft Developer: Nintendo
Rated “E” for Everyone Rated “E” for Everyone Rated “T" for Teen Rated “M” For Mature Rated "E" forEveryone
Released: April 2007 Released: August 2007 Released: November 2006 Released: November 2007 Released: May 2007
Copies sold: 2.48 million Copies sold: 1.9 million Copies sold: 1.89 million Copies sold: 1.87 million Copies sold: 1.82 million
Source: NPD 22
23. A MultiPlatform Marketplace
2 – PC Core Games
PC Core Games
Played on a computer through a CD-Rom or web
Platform download. Allows for internet networked play and /
Description or upgrades.
66% M / 34% F
Consumer Median Age – 32
Profiles 96% of PC gamers buyers are 18+
73.4% of U.S. households now own a personal
Key
computer
Market 2007 PC game sales accounted for nearly 10% of
Stats
total game software sales
Hardware developers: Alienware, Dell
Major Software developers: NVidia, Electronic Arts,
Players Blizzard Entertainment
Multimedia companies: Disney, Time Warner now
creating virtual worlds
Strategy 26.9 %
Top Title
Children/Family 20.3 %
Categories
Shooters 16.3 %
Role-Playing 10.0 %
Adventure 5.9 %
Trends to Rise of massive multi-player online role playing
Watch games (MMORPG)
A shift in top title categories as PCs become better
equipped to process action / sports games
Source: Entertainment Software Association, NPD, Nielsen 23
24. A MultiPlatform Marketplace
3 – PC Casual Games
PC Casual Games
Platform Played through online web portals that generally
Description require user registration
Consumer 56% M / 44% F
Profiles Median Age – 36
44% of casual gamers download games from web
Key 43% of most frequent gamers play online games
Market 44% of casual gamers download games from game
Stats oriented websites
MSN Games Miniclip
Major Yahoo! Games PopCap
Players AOL Oberon
Real Arcade
Puzzle/Board/Trivia/Card 57 %
Action/Sport/Strategy 19 %
Top Title
Shockwave/Flash 9%
Categories
Persistent Multi-player 9%
Other 6%
Emerging payment plans: ad-supported,
Trends to micropayments, subscriptions
Greater integration of marketing communication
Watch
channels
New distribution methods: ie – Burger King stores
distributed BK Xbox 360 games
Source: Entertainment Software Association, NPD 24
25. A MultiPlatform Marketplace
4 – PC Virtual worlds
PC Virtual Worlds
Platform Persistent, alternate universes that exist online and
Description are available to users 24 hours a day, 7 days a week
Some cater to kids, others to teens, and still
Consumer
Profiles others to adults age 18-34
Worlds can revolve around realistic alter-life,
medieval times, or animal avatars, depending on
demographic
Key 80 % of active internet users will have a virtual
Market world existence by the end of 2011
Stats Currently 173.61M registered virtual world users
Major Disney (Club Penguin, Webkinz)
Players Linden Labs (Second Life)
Blizzard Entertainment (World of Warcraft)
NCSoft (Guild Wars, Lineage)
Top Title Kid Worlds
Categories Alternative Universes
Massive Multiplayer Online Games (MMOGs)
Greater customization of virtual worlds to reach
Trends to target demographics (ie – kids, teens)
Watch Cobranding opportunities: virtual worlds paired
with movies, tv shows, and music
Source: Entertainment Software Association, NPD, Gartner Research 25
26. A MultiPlatform Marketplace
4 – PC Virtual worlds
Top Massive Multiplayer Online Games and Virtual Worlds
Name Release Date Active Users Target Group Genre
Cyworld 1999 20M Teens 14-24 Virtual World / Teens
World of Warcraft 2004 8.5M Adults 15-34 Fantasy / RPG
Habbo Hotel 2000 7.5M Kids 13-18 Virtual World / Kids
RuneScape 2001 5M Teens 14-24 Fantasy / RPG
Club Penguin 2006 4M Kids 8-14 Virtual World / Kids
Webkinz 2005 3.8M Kids 6-12 Virtual World / Kids
Gaia Online 2003 2M Teens Virtual World / Teen
Guild Wars 2005 2M Adults 18-34 Fantasy / RPG
Puzzle Pirates 2003 1.5M Adults 18-34 Puzzle
Lineage I/II 1998 1M Adults 18-34 Fantasy / RPG
Second Life 2003 0.5M Adults 18-45 Virtual World
Source: GigaOm, Gamasutra, TechCrunch 26
27. A MultiPlatform Marketplace
4 – PC Virtual worlds
Origin • US • S. Korea • Finland • US
# Active Users • 0.5 Million • 20 Million • 8 Million • 4 Million
Target • Mainly adults • 90% of Koreans in • Boys & girls, age • Boys & girls, age
Demographics their 20s 13-18 8-14
Miscellaneous • Linden Dollar • Now exists in • Localized in 31 • Acquired by
currency trades North America and countries Disney for $700
against the US Pacific Rim. Coming Million
Dollar soon to EU • Kids use penguin
• Operated by avatars to chat, play
Linden Labs, but mini games, and
everything within is build virtual
created by the users communities
27
28. A MultiPlatform Marketplace
5 – Mobile Games
Mobile Games
Platform
Multi-media devices are used to play
Description
games (mobile phone, PDA)
Consumer Mobile Phones: PDAs
Profiles 36% M / 64% F 56% M / 44% F
Median Age – 27 Median Age – 36
Key 34% of heads of households play games on these
Market devices
Stats 64 M cell phone game downloads in ‘05
Cell phone downloads generated $158 Million in
revenue in ‘05
Major Nokia: N-Gage
Players Palm: Handhelds & Operating Systems
Puzzles 45%
Top Title Arcade Classics 36%
Categories Board/Game Show/ Trivia 19%
Convergence of functions
(audio/video/gaming/cell phone)
Cell phone quickly emerging as a key platform in
Trends to the gaming industry
Watch Mobile phone as preferred method of playing
casual games
Source: Entertainment Software Association, NPD 28
29. A MultiPlatform Marketplace
5 – Mobile Games
Online and Mobile Games: Not Just Gameboy Anymore
32% 70%
of heads of households play of US males are gamers
games on mobile devices Who Plays Online Games?
such as cell phone or PDA,
up from 20% in 2002
68%
of casual gamers are female,
with an average age of 36
58% 42%
Of online Of online
gamers are gamers are
male female
Source: Nielsen, NPD Group, Interactive Advertising Bureau 29
30. Agenda
1. Why Advertising in Video Games?
2. Overview of the Video Game Industry
3. Advertising Opportunities in Video Games
4. Next Steps for Havas
30
31. Overview of Advertising Opportunities
lead time lead time
LOW cost HIGH cost
Product
Around In-Game In-Game Adver-
Place-
Game Dynamic Static games
ment
• Web site, banners • PC / Console • Console • Console • Casual
• Internet • Connected PCs & • Consoles & PCs • Consoles & PCs • Web-based
Consoles
• €5cpm • €? – depends on • €? – depends on • €10,000 - €1M+
• €20 - €35cpm game title and level game title and level
of brand integration of brand integration
31
32. Around-Game Advertising
MiniClip: A Casual Gaming Destination
New games are
featured on Display
landing page and advertising on
are rotated over a homepage
period of weeks
Top 10 games
MiniClip will host list creates
pre-developed additional
games but also buzz
have a dedicated
team of developers
who can create Other advertising
games to a client´s options include:
specifications • Homepage takeover
• Gamepage takeover
• Dedicated games
• 30M unique visitors • Advertising on
per month newsletter
• 2.5M users have • Pre-game video
downloaded the
toolbar
• 3.5 M users receive
the newsletter*
* Source: MiniClip 32
33. In-Game Dynamic
Description In-Game billboards that are served
dynamically (based on gamer
location) by 3rd party networks
Comparable 15 second commercial in cable TV,
Vehicles genre specific print, out-of-home
Measurement 3rd-Party audit services track reach
and frequency as well as special
game metrics such as how long
the gamer viewed the ad and at
what time of the day.
Lead-time 48 hours to 30 days
Key Players Ad serving networks: Massive Inc.,
IGA Worldwide, Double Fusion.
Budget Range
10€ - 30€ CPM
33
34. Product Placement
Description Full integration of brands and
products, hard-coded into games
by the developer
Comparable Product placement in films and
Vehicles television
Measurement Third-party research needs to be
developed to measure brand
awareness lift and ROI.
Lead-time 9 to 18 months
Key Players Game publishers: EA, Take- Two,
Atari, Activision, Konami, Vivendi
Universal, Sega.
Budget Range
Flat fee dependent on level of
brand or product integration and
the popularity of the game
34
35. In-Game Static
Description In-Game billboards and loading
screens that are hard-coded into a
game by the developer
Comparable Product integration in TV, cinema,
Vehicles video
Measurement Third-party research needs to be
developed to measure brand
awareness lift and ROI.
Lead-time 1 to 2 years, depending on the
game development process
Key Players Game publishers: EA, Take- Two,
Atari, Activision, Konami, Vivendi
Universal, Sega.
Budget Range Flat fee dependent on brand name
recognition of game title and
positioning of advertisement
35
36. Advergames
Description Bespoke mini-games that are
created around a brand or product
and are usually free to play
Comparable Loyalty programs, experiential
Vehicles marketing, guerrilla marketing
Measurement Ad-hoc research needs to be
developed based on opt-in rates to
measure the marketing program
results. Currently measured on
page views and click-through.
Lead-time 4 to 6 months for basic games
6 to 12 months for advanced games
Key Players Game Developers: Oberon Media,
Blitz, PopCap; Game Portals:
MiniClip, MSN, Yahoo!, RealArcade
Budget Range €10,000 to €1 Million
36
37. Fully Integrated Branding Opportunities
Doritos´ Unlock XBox Campaign
• Doritos wanted to “be in games”
• Microsoft invited participants to
develop casual game ideas
around the Doritos brand
• Five finalists were chosen, one
winner will have his / her game
produced and distributed online
(chosen by online voters)
• Online tie-ins include microsite
and documentary videos about
the finalists
• Increased brand awarness for
Doritos and gamer affinity with
Xbox
37
38. Strategic Alliances and Cross-Promotion
• Burger King and Microsoft teamed
up to create three brand new casual
games for the Xbox and Xbox 360
• Sold for $4.99 with Value Meals at
Burger King stores
• Sold 3.2 Million copies in 8 weeks (that´s $16 Million!!)
• Avoided expensive retail channels by selling in-store
• Increased awareness of BK´s new Value Meal program,
designed to compete with McDonald´s and Wendy´s
• All Xbox 360 players registered with Xbox Live, adding to
Microsoft´s database of gamer information
*Source: GameSpot, Reuters 38
39. Agenda
1. Why Advertising in Video Games?
2. Overview of the Video Game Industry
3. Advertising Opportunities in Video Games
4. Next Steps for Havas
39
40. Next Steps
• Advise and assist clients with gaming strategy and implementation
Creation of Video • Create in-house team devoted to gaming themes
• Pool talent and work closely with other Havas units
Gaming Unit
• Develop ideas one client at a time
• Create research to monitor ROI and brand lift for clients
• Create strategic agreements with gaming companies for the global
Strategic Global Havas network
• Work directly with developers and publishers to integrate brands
Partnerships & Alliances and create bespoke games for clients
• Develop Havas as a gaming knowledge center
• Acquire or create an in-house game development team dedicated
In-House Game to handling client needs as well as developing our own new projects
• Create a game publishing division capable of competing or
Development
teaming with larger, more established publishers.
40
Amount of time spent daily with each form of entertainment as compared to the amount of advertising money spent in US$. Makes games look like a great value for money and also an excellent opportunity to place advertising where it is currently lacking. Keep in mind that aside from gaming, all of these activities can be combined, so none has the viewers full attention. Most people surf the internet while tv commercials are on, or they read the paper while listening to the radio, etc. Gaming, as an immersive activity, requires the players full concentration, so there are no other distractions to take away from the experience or the messages.
Active gamers defined as someone who has purchased for their own use or been given a video game in the past 12 months 66.7 million equates to 23.2% of the total population Germany accounts for 26% of active European gamers All Active Gamers (000s ) UK: 15,753 France: 15,153 Germany: 17,129 Italy: 9,376 Spain: 9,290 Total: 66,701
Xbox 360 is the only one of the three consoles to allow in-game advertising to be delivered on its hardware. All advertising must be served through its subsidiary Massive, Inc. Sony has yet to announce which company they will work with when they allow for in-game advertising to run on its platform, and Nintendo shies away from advertising on its console altogether. Xbox 360 has been selling extremely well, mainly because it has the most available titles, making it even more obvious as a potential partner for in-game advertising.
Most console-based games are also released for PC, requiring powerful processors and video chips. PC games do not run simultaneously to the internet (meaning you cannot play an immersive PC game and also surf the web), so this is still a completely immersive form of entertainment.
PopCap’s games have been downloaded more than 150 million times,and its flagship title Bejeweled has sold more than 5 million units across all major platforms. PopCap games are available for Web, PC and Mac, Xbox, Xbox 360, cell-phones, PDAs, and other mobile devices. PopCap also runs a developer program to provide an opportunity for independent game developers to create and spread their games. Oberon Media is the largest creator of casual games and has recently signed a deal with MySpace to create their gaming platform. MiniClip is the largest casual games website in Europe and is continuing to expand its presence in North America. 40 million unique users per month. 25 million users for their toolbar and 35 million users receive the Miniclip newsletter with updates on new games.
This is an area to watch, particularly as mobile phone capabilities expand and improve. Increases in mobile usage mean more potential time spent with mobile games. These games must accomodate the structure and regulations of mobile technology. Small screens, short play periods, lower quality (but improving) graphics, etc.