1. A paid game should not have advertisements in it.
2. It is ok to have advertisements in a game if the game is free.
Rovio has tried it both ways. Their iOS (iPhone and iPad) game is a paid app. The Android version of their game is free and supported by in-app advertisements. The advertisements for the free Android version have become progressively more intrusive over time. It has now reached the point where a full Microsoft advertisement (ironically) for Windows 7 runs before you can play the game on an Android phone. You can see a screen photo of this advertisement running on my Nexus One to the left. This is annoying but acceptable in a free game.
Rovio, however, broke rule #1 this week.
Fan backlash over adverts injected in Angry Birds HD (9to5mac.com)
The 99 cent iPhone version of the game dropped from a super-spectacular 5 star average customer rating to 4 stars for the 1.5.3 update. Customers are still giving good rating but are commenting on the aggressive ads.
The update for the $4.99 game for the iPad has not won fans so far. The version 1.5.3 update, which added ads, has a 2.5 average customer rating so far. Previously, Angry Birds HD had a spectacular 4.5 average rating (out of a possible 5). And, comment after comment on the Angry Birds HD App Store page complain about the ads.
Having sold millions of units without the possibility of refunds, Rovio can afford this negative feedback for the moment. The question is: Will this loss of goodwill translate to reduced sales or, worse, poor initial sales for their upcoming Angry Birds Rio movie tie-in edition?