Set 30,000 years into the future, the video game Anarchy Online seems an unlikely place to see billboards advertising the newest CD by Motley Crue or the "Family Guy" on DVD.
But such ads are increasingly showing up in the virtual realm of video games as corporations pursue potential customers into their escapist fantasies.
With growing numbers of young men spending their spare time playing video games instead of watching television, some advertising companies have begun specializing in infiltrating digital entertainment. They are pioneering the use of in-game billboards and product placement, which some experts say could increase significantly in coming years.
"TV ratings among males 18 to 34 have declined specifically due to video games," said Michael Goodman, a senior analyst at research firm Yankee Group in Boston. He estimates the market for in-game advertising will reach $562 million by 2009, up from just $34 million last year.
The importance of the burgeoning market was evident last month in Los Angeles when about half a dozen game publishers including Electronic Arts Inc. and Ubisoft Entertainment outlined their coming titles to an audience of advertisers and entertainment executives at a marketing event known as the L.A. Office RoadShow. The show, traditionally tailored to the television, film and movie industries, hosted its first video game day this year.
"We just got to the point where we had to get involved in gaming," said Mitch Litvak, the event's founder. "In the marketing community it's so important to reach that audience for specific brands that if we didn't do it, someone else would have."
Some video game makers are eagerly exploring the financial opportunities created by allowing advertising to appear in their fantasy worlds, noting that the additional revenue can help cover the millions of dollars it costs to develop a cutting-edge title.
The publisher of Anarchy Online, Funcom, has used revenue from billboards in Anarchy Online to subsidize a basic version of the game for free over the Internet, said Terri Perkins, a Funcom product manager. It also has used the money to develop expansions to the Anarchy Online fantasy world that players can pay extra for.
Executives at Ubisoft, publisher of the popular Splinter Cell action games based on the work of writer Tom Clancy, say they have poured ad revenue into developing titles rather than bolstering profit.
