Cable Ad Execs Explore the ArcadeWant commercials to be seen? Videogamers spend lots of time watching 5/05/2006 08:00:00 PM Eastern
Visiting the Games section of Comcast Cable’s high-speed Internet portal is like being a kid just let out of the classroom for recess. One click leads to arcade-style game downloads like Pirate Poppers and Turtle Odyssey. Another whisks players to games like Cinema Tycoon and Hamster Ball, which users can play online for free. For hardcore game enthusiasts, there’s a direct link to Game Invasion, a secondary portal filled with breaking news about new Xbox gadgets and what’s in store at the videogame industry’s G4 annual developers’ conference.
Oh, and gamers can shop for a house here, too.
Sitting astride the portal’s main content are banner-style messages from the likes of home builder KB Home and mortgage broker LoanWeb.com. According to game developers and strategists in the cable industry, they’re part of what could be a growing component of the cable-connected gaming experience: advertising.
“We feel strongly that advertiser-supported games can be a big push by cable operators,” says Alexander Libkind, a co-founder of Zodiac Gaming, which provides TV-based game content to operators including Cablevision Systems Corp. of New York. At the National Cable & Telecommunications Association convention last month, Libkind was one of a handful of game developers encouraging cable companies to pursue advertiser support for games as a way to foster more usage and to monetize the category.
Cablevision Systems executives are thinking along those lines. According to Patrick Donoghue, VP of development for video and digital TV, it is re-examining its six-month-old policy of foregoing advertising within its Optimum interactive- games offering and is exploring ways to integrate ads within game screens. The most likely form for videogame advertising over Cablevision’s digital video conduit, he says, would consist of onscreen banner ads that, when clicked, would link to video commercials or infomercials that flow from Cablevision’s video-on-demand platform.
Videogames offer promise as an ad-supported platform because they deliver large audiences and attract surprisingly diverse demographics. Laurent Weill, executive chairman of interactive-games provider VisiWare, says that close to 10% of Sky TV customers in the UK use the company’s Playin’ TV game service and that the service ranks 23rd among Sky TV’s 250 TV channels for audience levels, ahead of ESPN and MTV.
Plus, gamers tend to stick to the screen. In Pennsylvania, about 5% of Blue Ridge Communications’ customers in northeastern Pennsylvania spent an average of 8 hours each during March playing a Texas Hold ’Em poker game, says Tyrone Lam, president/CEO of game provider Buzztime Entertainment. Cable operators also like the fact that casual online games appear to attract a more diverse crowd than the stereotypical adolescent males who typify other videogame categories. Adult women are the most frequent buyers of casual game downloads supplied by RealNetworks’ RealArcade broadband game platform, according to RealNetworks General Manager Julie Pitt.
A DIFFERENT BUSINESS MODEL
The category may have potential, but cable companies and game providers are just now beginning to explore business models for integrating advertising into cable-delivered game services. Pitt says RealNetworks is working on ways to inject advertising into the RealArcade game portal distributed by cable and DSL providers.
She believes that advertising inclusion could help monetize the category and get around a tricky economic problem: Only about 2% of users who sample games end up buying them. Pitt says business deals with cable and DSL distributors could vary depending on whether the broadband providers carry ad-supported or ad-free versions of RealArcade.
Cable executives are quick to point out that onscreen ads surrounding online or set-top game platforms represent a different approach from the advertising model of injecting company brands into game content itself. That’s a growing business, but, unfortunately for cable operators, it’s controlled almost completely by game developers, which pocket the proceeds.