UPDATE: Electronic Arts has responded to reports that it will introduce in-game ads to its video games. The statement reads: “Following incorrect reports suggesting that we are looking to introduce ‘TV-style’ commercials into our games, we wanted to clarify that in-game advertising for console games is not something we’re currently looking at, or have signed any agreements to implement. Creating the best possible player experience remains our priority focus.”

ORIGINAL STORY: The gaming landscape is about to meet another unnecessary evil: in-game advertisements. Axios reported the news and spoke about playerWON, owned and operated by Simulmedia. It is the first in-game advertising platform that big-name marketers may use to run TV ads. Users will determine if they want to watch a 15 or 30-second ad in exchange for in-game perks.

Let’s unpack.

The root of why ads are coming

Marketers find difficulty reaching target audiences – gamers – due to our cord-cutting tendencies.

Simulmedia has tested ads SMITE. They hope to bring more console game developers to the table besides EA and Hi-Rez Studios, SMITE creator. Gamers would receive points or other in-game rewards for watching an optional 15 or 30-second commercial. “This makes the ads less intrusive,” Dave Morgan, chief executive and founder of Simulmedia, said. Mr. Morgan also told WSJ, “The most fundamental piece is we have to create an ad experience that gamers accept. Maybe they won’t love it, but at least they can say, ‘Yeah, for a couple of points or a battle shield, I’ll watch the ad’.”

SMITE - In-game Ads — SMITE – In-Game Ads – Credit: Hi-Rez Studios

Dave Madden, who once handled EA’s in-game advertising and brand partnerships, joined Simulmedia to push in-game ads forward. He attributed the success of mobile games and their ad campaigns to playerWon’s vision. “It’s roughly a five to ten billion – depends on whose research you read – a year advertising business already in mobile gaming,” were the figures Madden revealed to beet.tv in a 2020 interview. In the interview, he also details how gamers are not passively taking in content. “But in gaming, gamers are 100% involved in the experience.” He followed up with, “So the advertising approach has to be much more nuanced and sensitive to that higher-level engagement.” Gamers don’t want their experience interrupted by load screens, so we’re supposed to accept advertisements?

The secondary root of in-game ads: Live Service Games.

In revealing that free-to-play games are a field ripe for in-game ads, Madden indirectly convinces me that live service games will spawn practices like this “opt-in rewarded advertising.

Fortnite – Credit: Epic Games, People Can Fly

Madden explains, “So, game publishers today are increasingly making their games free-to-play or have areas in their games even if they were paid games that are free to play. So, the majority of the activity that’s happening in gameplay today is called live service gaming.” He goes on to talk about Fortnite, a live service game that “is completely free.” The topic moves into buying virtual currency or season passes within the game. In short, he speaks enthusiastically about the revenue the ‘microtransaction economy’ brings.

According to Simulmedia, gamers want this

Mr. Madden then talks about the players who aren’t spending money in these games. “But the other, let’s call it 90 plus percent of the players aren’t spending any money and therefore, aren’t necessarily getting access to all that content.” Ads are the remedy for those players who don’t want to spend real money on the content. Simulmedia held surveys on Reddit and found that “75% of all console gamers, in free to play games and paid games, would like the opportunity to watch an ad to get additional content that they otherwise would have to pay money for.”

While I see the benefit for players, I’m hesitant to embrace the idea. It doesn’t sound invasive, but we know what happens when we give an inch. It starts with free-to-play, but let’s see how quickly that changes. I also see the ‘player controlled’ aspects disappearing in the future, but I am a cynic.

Will you be willing to watch a 15-30 second ad in your video games?