Video games reach more players than retail sales figures suggest, according to a report issued on Wednesday by private research and measurement firm Interpret.
The firm's Gameasure report comes as video game makers try to woo advertisers, who are looking for new ways to connect with young males — an audience that plays a lot of video games and is watching less network television.
"Retail sales capture only a portion of the total audience playing individual game titles, suggesting current in-game advertising deals, which are primarily tied to these sales figures, undervalue the medium," Michael Dowling, Interpret's CEO, said in a statement.
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Dowling said the report shows advertisers should consider the impact of social game play, game rentals, used game sales and pass-around.
For example, NPD Group research showed Activision Inc.'s (ATVI) "Call of Duty 3" sold 2 million units in the United States as of February 3. According to the Gameasure report, that game was played by 9 million people.
Electronic Arts Inc. (ERTS) has sold more than 6 million units of "Madden NFL 2007," but 14 million have actually played the game, the report said.
Microsoft Corp. (MSFT), maker of the Xbox 360 video game console and the blockbuster "Halo" game series, paid $200 million last year for in-game ad company Massive Inc. — lured by Massive's agreements to dynamically place ads on such things as billboards and vending machines that appear within online games from Ubisoft Entertainment SA, THQ Inc. (THQI) and Take-Two Interactive Software Inc. (TTWO)
Google said on Friday it bought video game advertising firm Adscape. Technology Web site Red Herring, citing individuals close to the deal, said the price tag was seen at around $23 million.
Independent in-game advertising start-ups Double Fusion and IGA Worldwide have already signed deals with major video game publishers.
Parks Associates said 2005 revenue from dynamic in-game ads was $80 million in 2005 and forecasts it could grow to $605 million by 2010.