Innovation & Design

Xbox's Exclusivity Option


Earlier this month, Next-Gen spoke with two of the biggest in-game ad players (Double Fusion and IGA Worldwide) about trends in the in-game ad industry, and what’s being done so that the sector meets its full potential.

We also touched on how Microsoft’s acquisition of top in-game ad provider Massive may hinder the industry’s growth. There is the possibility that Microsoft could deem Massive as the exclusive provider of ads for the Xbox 360, essentially blocking competitors such as Double Fusion and IGA Worldwide from 360-related revenue.

Microsoft itself wouldn’t comment on the possibility of such an exclusivity deal, giving Next-Gen the standard, “Microsoft does not comment on speculations or rumors" response, which certainly isn’t a denial.

Massive wasn’t able to take part in our last in-game ad article, but this time around, president of new media Nicholas Longano was able to find some time to comment on his company, providing more insight regarding an Xbox 360 exclusivity deal.

While he did offer more than Microsoft’s “no comment” response, Longano didn’t provide a conclusive answer to the exclusivity question. When asked if Massive would be the only company allowed to bring ads into Xbox 360 games, he said, “At this particular point in time, we’re working and we’re integrating and applying ourselves across many platforms. We’ve got a technology that’s proven, robust … It’s a solution that works, it’s accepted by the publishing world, by advertisers, and it provides a good game experience, and right now, that’s really the most important element.

“As to where we’re all going to be in 24 months, 36 months, we’ll wait and see.”

The most obvious losers in the case of a Massive-Xbox 360 exclusivity deal would be Massive’s in-game ad rivals, who would be missing out on revenue generated from the console. With online connectivity on the rise, the importance of tapping into all available revenue opportunities is more important than ever for in-game ad companies. For the overall industry, however, Longano doesn’t believe an exclusivity deal would hinder growth.

“I don’t see how it could possibly hurt the industry,” he said. “I think at the end of the day, the most important element is that we’re working with the publishers that are in our network, and representing those titles.”

He continued, “The worst thing that can happen [for the industry] is when you have multiple representatives going out there and trying to represent the same content. That’s when there‘s confusion that takes place. … Confusion slows down the market. Right now, I think that the marketplace, and when I say the marketplace, I’m talking about advertisers, right now they know there’s a solution. Massive is a tremendous solution. It’s tried, it’s tested, it’s proven.”

When pressed about the issue, he said that his top priority is expanding Massive’s business and services by working closely with publishers. “To be honest with you, [an Xbox 360 exclusivity deal is] not something that I think about on a daily basis. All I know is that right now, we have titles, we’re working with publishers, and that’s the most important thing.

“…What do I think about? I think about getting more publishers to the network, and I think about making sure that the ads are delivered in a way that customers can enjoy the gameplay experience. That’s what I think about.”

Becoming more Massive

Aside from Xbox 360 exclusivity issues, Longano reiterated what many in-game ad proponents have evangelized: In-game ads are flexible, focused and a better deal for advertisers. Under the solid gold wing of Microsoft, Massive is set to grow based on these in-game ad qualities. The company has already served up around 80 million ~90 minute game sessions, across 100 titles and 38 publishers.

A substantial amount of Massive’s growth has to do with TV, or rather 18-34-year-old guys who aren’t watching it anymore.

“We quickly are working towards migrating dollars away from television, because advertisers realize these gamers, this 18-34-year-old male audience, is watching less and less TV on a nightly, weekly basis.

“Clearly, the Massive network pockets television dollars. … Advertisers can easily buy impressions, reach and frequency et cetera … exactly the same way as basic television buys, with the exception that hey, this is a connected audience and there is a hell of a lot more flexibility…”

According to Longano, it’s connectivity that’s going to play the largest role in growing the in-game ad market. Microsoft has obviously been promoting connectivity for some time with Xbox Live, and the Wii and the PS3 will both encourage connectivity as well. Of course, there’s also online PC gaming.

He said that publishers and advertisers will reap the benefits of connected platforms.

“The more gamers that are connected to the audience that you can aggregate, the greater the reach that we can provide advertisers. And with that comes a greater yield for the publishers within the network as well.”

Longano added, “Connectivity is important. I think that we’re seeing the connectivity rate of the next generation, which is significantly higher than anyone initially or originally anticipated.”

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