Media & Money: EA’s Riccitiello Sees ‘Hurdles’ Before In-Game Ads Catch On

The business of advertising in videogames still faces significant challenges before it can siphon off a sizable portion of major brands’ advertising budgets, though the growth of big budget, Web-based games should help accelerate the segment’s growth, said the leader of one of the gaming industries top players.
During a keynote interview on Oct. 15 at the Media & Money Conference in New York , 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 dollar company.
“I’ve been more bearish than bullish [on in-game advertising],” Riccitiello said. While Riccitiello 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 hurdles 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 shorftfalls, and the simple fact that gamers typically spend $50 to $60 on games. “Those all represent an impediment to rapid growth.”
Still, more and more games are being created to be played via an Internet connection, which theoretically allows advertisers more real time access than games which are created with extensive lead times and little opportunity for advertisers 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 which 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 deliverng 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.