Nielsen to Actively Measure Video-Game Usage in Households

Nielsen Media Research, whose TV viewer surveys have long determined how much advertisers pay for commercials, is getting into the digital joystick business with a new ratings service for video games.

Nielsen on Wednesday announced plans to launch GamePlay Metrics, designed to give the video game industry a precise system of electronic measurements to standardize the burgeoning market for the buying and selling of ads in its products.

The new service also will track the activities of gamers across other media platforms, including television and the Internet.

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Nielsen's plan underscores the growing importance of the video game industry to advertisers, who already have their products placed in many titles, particularly those dealing with sports or set in cities.

Still, unlike television, where ratings are used to help negotiate commercial rates, the video game industry has yet to come up with standard measurements to use when buying and selling advertising space.

[The Nielsen press release said that GamePlay Metrics was an expansion of its existing People Meter technology, which keeps track of signals coming into a television sets used by "Nielsen families," presumably including video and audio feed from home gaming consoles. GamePlay Metrics will place devices directly on the consoles themselves to more closely monitor daily usage.]

Nielsen's latest venture will also provide advertisers with data about the playing habits and tastes of gamers, typically the hard-to-reach young male demographic highly prized by advertisers.

The sale of video game hardware and software generates global revenues of about $30 billion a year, while advertising and brand displays have grown increasingly prevalent in the virtual landscapes inhabited by gamers.

Forecasters expect the emerging market for in-game ads to reach $1 billion to $3 billion by 2010, but that is a fraction of the more than $60 billion spent on all television advertising.

"The value of an entertainment medium is directly proportional to how well it is measured," Jeff Herrmann, vice president of Nielsen's newly created wireless and interactive division, said in a statement. "A reliable and accurate standard of measurement for video gaming will drive advertising investment in this medium."

In an interview with Reuters, Herrmann added this would "ultimately ensure that the consumer gets a better game" by providing a new revenue stream to offset the steep costs of developing more sophisticated titles.

He said Nielsen's own studies have suggested that virtual product placement and brand integration in some genres, such as sports and games in urban settings, can actually enhance the experience of users by making them seem more realistic.

He acknowledged that other formats, such as fantasy and science fiction, may not lend themselves as easily to advertising.

"The industry is very sensitive to that point, and contextual relevance matters quite a bit," he said.

Nielsen spokeswoman Karen Gyimesi said the new video game service will build on the ratings sample the company already has in place for television, with some preliminary gaming data being made available in early 2007.

But she said the full service would probably not be up and running until the middle of next year.

Nielsen, a unit of media and market research company VNU, has been measuring TV audiences since the 1949-50 broadcast season.