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Exploring the Possibilities of Videogames As an Advertising Platform

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Exploring the Possibilities of Videogames As an Advertising Platform Exploring the possibilities of Videogames as an advertising platform By: Adrian Castillo Perez Date: 27/05/2009 ~ 1 ~ Content Page Preface p.3 1. Introduction p.4 1.1Hypothesis p.4 1.2What is this thesis about? P.4 1.3What benefits can come from this thesis? P.6 1.4Sub-questions p.7 1.5Research methodology p.7 2. The video game industry p.8 2.1History of the videogame industry p.8 2.2Present state of the videogame industry p.11 2.3Current struggles of the industry p.16 2.4Why is the videogame industry so important? P.19 3. Advertising industry p.21 3.1History of advertising p.21 3.2What makes an effective advertisement? P.24 3.3Brief look at the present state of advertising and why it needs to explore new mediums p.27 3.4Stake holders p.36 4. Videogames as an advertising vehicle p.39 4.1Understanding videogames as a medium p.39 4.2What separates videogames from other forms of media p.44 4.3What has held back advertisers from this medium? P.49 5. Possibilities of advertising in videogames p.51 5.1Gamer types and how their consumer behavior varies p.51 5.2Game types and how they relate to target groups p.54 5.3Different advertising models within videogames p.61 5.3.1In-game: Integrated ads p.62 5.3.2In-game: Passive and dynamic ads p.65 5.3.3Advergames: physical and online distribution p.67 5.4Alternative ways advertising could be used within the models p.69 5.5Requirements and advice for advertisers considering this medium p.73 5.6The possible resistance to advertising in videogames p.78 5.7The future of advertising in videogames p.81 6. Conclusion p.83 6.1Re-evaluation of my hypothesis p.83 6.2The contributions of my thesis p.84 Appendix p.85 - Questionnaires p.85 - Advantages and disadvantages for advertising within games p.94 - Bibliography p.97 ~ 2 ~ Preface This document is a thesis created as part of my graduation on ‘international communication management’. I took the opportunity to use my knowledge and expertise to shed new light on a topic that has largely gone unnoticed, an area in advertising that greatly needs more attention and research: Advertising using videogames. The thesis was written for anyone in advertising or simply interested in the topic of new media, alternative solutions and future trends. The purpose of this document is to present the reader with information on why advertising needs to explore new means of communication and presents videogames as a possible effective medium. It is not intended to dictate how advertisement should be done, or as an analysis on the problems the advertisement industry is facing. This document explores a potential solution: videogames, it looks into all necessary areas an advertiser would be interested in and need to consider to then come to a conclusion on this new medium. This thesis is being written during the growing stages of the videogame industry, many things will change, regulations and negotiations will take place to solidify cost models and fix advertising concepts. One of the reasons for writing the thesis at this current time is because it is a largely untested and non-standardised media with the potential for advertising. This document paints a picture of the current situation and possibilities, by the end the reader or advertiser should be able to take the information and verify what the potential of this industry is as an advertisement platform. This can be regarded as an investigation into the possible cooperation between the advertising industry and videogame industry, and whether or not it would be an effective unity. ~ 3 ~ 1. Introduction This chapter presents the definitions for this thesis. It introduces the reasoning for this thesis. The following questions are answered within the following pages: - Why this subject area? - What benefits can come from this thesis? - What is my hypothesis? - What sub questions will be answered in this document? - What research methodology is used? 1.1 Hypothesis The hypothesis for this thesis is: “Videogames as a platform could become one of the most effective forms for advertising” By the end of this thesis enough information and analyses is presented to either support or nullify this initial claim. 1.2 What is this thesis about? “Games are becoming as viable an advertising medium as television” and other forms of media ever were, “it just took a while for marketers to come around”. 1 This thesis delves into the largely un-discussed area of advertising in videogames. Advertising and videogames are two industries that have finally grown and expanded enough to benefit from each other. This thesis essentially discusses the possibilities of advertising in videogames and whether videogames can hold themselves as an advertisement platform as other mediums have, such as: T.V, Radio and print media. The videogame industry is growing at an unprecedented rate (even in difficult economic times); while other forms of entertainment industries are struggling. Furthermore and perhaps most interestingly, there is incredible untapped potential within the videogame industry, a young and flexible industry. This thesis covers such potentials and whether or not videogames are actually an efficient form of advertising. There have been attempts in the past where marketers have attempted to reach their audiences through videogames. However due to the very narrow target groups found 30 years ago when videogames emerged, and the technological drawbacks, advertisers have not been able to truly explore the potential of this medium. Finally the videogame industry has become a culturally accepted medium, especially considering that the current populous generation (18- 35 years old) and the future generations (0-18 years old) have all grown up exposed to or participating in gaming. 1 (David Edery, Ethan Mollick 2008, Changing the game . p.37) ~ 4 ~ This area is of great personal interest to me simply because as a gamer and communications student I have seen tremendous possibility for videogames and advertisements to function effectively in synergy. This thesis has given me the chance to finally indulge myself and research whether or not these speculations are indeed true or just mere speculation. Chapter 2 The first chapter of this thesis acts as an introduction to the gaming industry and the impact they have both culturally and in a business sense. The chapter starts by briefly presenting the history of videogames and how they came about; this allows the reader to see how in a mere number of years an industry giant developed. The next subchapter discusses the current generation of video gaming platforms; this is incredibly relevant and important because these platforms are what potential advertisers would be using to connect with their target groups. A look at how important and relevant the videogame industry is follows. The focus on this area is how videogames have impacted the entertainment industry and its markets (consumers Chapter 3 The following chapter focuses on advertising; very much like the previous chapter discussed. A brief look at the history of advertising is presented followed by a look at the current state of advertising in media and why new areas need to be explored by advertisers. An explanation and look into what makes a good advertisement is discussed, this acts as a control to why or if advertising could be effective as videogames. By presenting an agreement of what makes a good advertisement the reader can easily compare as to how other media compare to video games as a platform. Finally the chapter concludes by referring to both industries as a stake holders based on my hypothesis; this area covers who would be/is affected by advertising in games. Chapter 4 These subchapters focus on superficial areas. ‘Understanding videogames’ helps the reader understand how this creative entertainment form functions as to visualize how advertisements could be implemented and function in synergy. Furthermore ‘how videogames separate from other forms of media’ takes into consideration what separates this medium from the rest as to further expose why videogames make such an interesting communicative vehicle. The chapter finalizes by touching on the reasons why it has taken so long for advertisers to tap into this medium. ~ 5 ~ Chapter 5 Chapter 5 represents the main analyses of this thesis. It takes into consideration all areas of interest needed to understand the possibilities, the grey areas, advantages and disadvantages and what the future may hold for this new form of advertising. By this point the reader has a good understanding on videogames and advertiser’s need to explore. This chapter grants the reader the theory and logical reasoning needed to approve or disapprove my hypothesis. The chapter begins by segmenting videogames by their markets and target groups followed by the clearly defined methods that advertisers could use to advertise. The chapter then focuses on the potential factors that could affect an advertisers decision, these are; ‘requirements’, ‘potential resistance’ and concluding with a look at the predicted future for this topic. Chapter 6 The final chapter of this thesis acts as a conclusion. It summarizes the findings, reevaluates my hypothesis and finally expresses what benefits this document has brought. 1.3 What benefits can come from this thesis? There has been previous research done in this area, and such research will be used in my thesis. However said research is surprisingly scarce and more often than not outdated. Other times the research simply focuses on specific issues around the topic in question. My thesis brings an up to date look at this new phenomenon of advertising, it objectively looks into the potential, possibilities and drawbacks for this method of advertising.
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