Video game publisher THQ Inc. said late Sunday it has joined Massive Inc.'s video game advertising network that gives advertisers a way to place real-time ads in games via online connections.
For example, a soft drink maker, through Massive, could put its logo and other branding on a vending machine or billboard that appears in a video game. The system allows advertising to change, so another player another time might see a different ad.
Such ads are rare in the current generation of titles from major publishers. But the area could grow quickly and become a key revenue driver as more gaming consoles and hand-held players take advantage of always-on Internet connections.
Video game players say that ads in game genres such as racing, sports and urban action can add authenticity to the experience. At the same time, a recent study suggested that well-placed ads can have a positive effect on brand awareness.
THQ, publisher of video games like "Destroy All Humans!" and the upcoming "Saint's Row," is the biggest win yet for Massive, which has a team that sells ads in games from 29 publishers.
THQ executives said they would deliver an action-adventure game in the first half of 2006.
Games also likely to be added to Massive's network are future versions of racing title "Juiced" and those from its "MX" motocross franchise, a THQ spokeswoman said.
"Dynamic, in-game advertising not only offers publishers new revenue opportunities, but when done properly creates added realism that can actually enhance game play," said Kelly Flock, executive vice president of worldwide publishing for THQ.
Video game advertising is seen drawing dollars from television and other more traditional media outlets, as males aged 18 to 34 flock to new entertainment mediums.
Massive Chief Executive Mitchell Davis said forecasts from a variety of industry sources call for the real-time in-game advertising business to grow into a $3 billion-plus global market by 2010.
Nielsen Entertainment expects U.S. spending on static ads in console and PC games to be $75 million this year and to grow to $800 million to $1 billion by the end of the decade.
Unlike real-time in-game ads, static ads are burned into the game's code and do not change.
Davis said ad rates for dynamic ads are very similar to those now seen in the cable television market and added that Massive has worked with 40 advertisers, including the Coca-Cola Co.