Various news reports say that Microsoft Corp. plans to pay $200-400 million for Massive Inc., a privately held company that places ads in videogames.
The deal to buy the two-year-old startup demonstrates the increasing importance of advertising in nontraditional media, according to a Wall Street Journal report.
Microsoft and Massive spokeswomen have declined comment.
Clients of Massive include Coca-Cola Co., Honda Motor Co. Ltd. and other advertisers that are spending for ads in video games. Massive has served more than 35 million game sessions.
Massive chief exec Mitchell Davis told Reuters that forecasts from a variety of industry sources call for realtime game advertising revenue to grow into a $3 billion-plus global market by 2010.
In-game ads allow advertisers to run campaigns for specific periods of time, instead of buying a slot that is hard-coded into a game, so billboards and storefronts in games can change to more closely resemble the real world that some games attempt to recreate.
Recently Massive signed an agreement to be an exclusive partner with MLB Advanced Media (MLBAM) for the delivery of dynamic advertising in certain MLBAM-licensed videogames, and with the Major League Baseball Players Assoc. (MLBPA).
Advertising has long played a prominent role in sports videogame titles, according to a Massive announcement. But this advertising took the form of hard-coded, static product placement. Massives Network and technology allows MLB Advanced Media and 2K Sports titles to leverage dynamic advertising for ever-fresh brand messaging in their games, mirroring the rapidly changing and expanding advertising opportunities in the live-action sports industry.
Videogame publishers are hoping that in-game advertising will add revenue to overset rising game development costs.
Microsoft already attracts gamers with its Xbox Live service that connects gamers to the Web through its Xbox and newer Xbox 360 consoles. In the future, advertisers will be able to place ads through adCenter across Microsoft's other platforms such as Xbox consoles and mobile devices.
Massive (www.massiveincorporated.com) is backed by DFJ Gotham, DFJ New England, RRE Ventures, NeoCarta Ventures, Tobat Capital and Newlight Assoc. The company is based in New York City with offices in Los Angeles, San Francisco, Europe and Asia/Pacific. With 35 game publishers and more than 100 titles, the Massive Network offers advertisers the ability to reach an aggregated gaming audience in realtime across multiple platforms. Some 60 blue-chip advertisers have run campaigns across the Massive Network throughout North America and Europe. Publishers in the Massive Network generate the highest yield per title from dynamic in-game advertising, enabling them to leverage the value of their content while preserving and enhancing the game experience. Massives technology allows for all forms of downloadable media and advertising content to be contextually integrated into the game environment, including image, audio, video and game object formats.