- Mike Shields, Mediaweek

NEW YORK The business of advertising in videogames still faces significant challenges before it can win a sizable portion of major brands' ad spending, though the growth of big-budget, Web-based games should help accelerate the segment's growth, said the leader of one of the gaming industry's top players.
 
During a keynote interview today at the Media & Money Conference here, Electronic Arts CEO John Riccitiello cited "a number of hurdles" which need to be cleared before in-game advertising can grow at a faster clip. Currently, in-game advertising generates revenue in the "tens of millions" for EA, which according to Riccitiello is a $5 billion company.
 
"I've been more bearish than bullish [on in-game advertising]," Riccitiello said. While he reported that major brands are attracted to videogames' demographics and heavy user engagement, to date the medium has yet to become a staple tactic. "There are hurdles before we get there," he said. "Those hurdles are not small."
 
Among the obstacles that Riccitiello listed were the game industry's complex relationships, which require in-game ad programs to be approved and implemented by publishers and multiple distributors, as well as varied technology platforms, measurement shortfalls, and the simple fact that gamers typically spend $50 to $60 on games. "Those all represent an impediment to rapid growth," he said.
 
Still, more games are being created to be played via an Internet connection, which theoretically allows advertisers more real-time access than games that are developed with extensive lead times and little opportunity for sponsors to jump on board once they are released. Riccitiello said that 2008 would likely be the last year that EA would produce games that are built to live "offline only." He cited the recently released evolution-themed multiplayer game Spore, which allows users to create elements of the game that can be used by thousands of players, as well as games played on social networks like Facebook as examples of the company's emerging Web-based focus.
 
As for Google's recent move to extend it's AdSense ad platform to video games, Riccitiello said he hadn't yet held any discussions with the search giant about delivering ads into any EA titles. But he's open to such talks. "Of course we would partner with them or anybody who would cut us a check," he said.