Ethics and Law in New Media/Advertising in video games/Mobile

The iPhone and App Store

In-game advertising on console platforms such as Xbox 360 and Playstation 3 has become somewhat established in the recent years. The mobile side of things however has been fairly undeveloped. The reason for that was the absence of hardware, capable of producing a decent platform for games and sensible ad placement. That all has changed with the launch of Apple’s iPhone and App Store. A good illustration to the success of the App Store is the example of a small Mac games developer Pangea Software. In 2008 they ported one of their games to the iPhone, expecting it to sell 10000 to 20000 copies over the lifetime of the product. That amount however was sold in a single day. From July 2008 till January 2009 it sold a total of 810000 copies. The profit earned was 1.5 million dollars (1).

A mobile gaming platform

The success of the iPhone platform has been huge, but according to Raven Zachary what’s more interesting is that there are 27000 apps that have been downloaded half a billion times. 1 in 3 has been a game or an entertainment app. Some have even considered the iPhone to be superior to the dedicated mobile gaming consoles such as Nintendo DS and Sony PSP, citing better internet connectivity, multitouch capabilities, accelerometer and location awareness. But the most important factor is that it is also a phone, which people tend to carry everywhere (1). When a person is waiting in line or for a meeting he can just take out his iPhone and play a game for a couple of minutes. Suddenly this makes the iPhone very interesting not only to game developers but also to advertisers, who can reach a broader audience through in-game advertising.

A way to compensate the cost of development

Game developers are interested in game advertising as a way to compensate the development costs. Another factor is the model of receiving compensation. Before in-game advertising the developer received compensation only when the game was actually downloaded and nothing for the amount of time the game was played (4).

Advertising from Greystripe

Ad-publisher Greystripe has also seen the interest in game advertising on the iPhone platform to the extent of offering a dedicated SDK which enables ads integration and reporting APIs. This enables developers to gain money from every use of the application or from every time their game is player on the phone (3).

Alpine’s in-game iPhone ads

Alpine Electronics has been the first to sign a deal with game developer Fishlabs to feature ads in Rally Master Pro. According to CEO Michael Shade “the Alpine brand has been integrated very prominently in the game through massive branding of the first car the players unlock.” The integration is seamless and is also used to add an extra level of realism to the game. A lite free version was also intended to be launched with more branding involved (2).

Advertising as a way of lowering application costs

Apple’s App Store has influenced a whole new system to evolve. Currently there are two types of applications: free lite versions and full paid for versions. There also ways for developers to offer in-game purchases so the games can be offered as free with some basic levels included but the user will have to pay to unlock the additional content. In-game advertising is an opportunity for game publishers and developers to keep good quality games free as well as to include more content without forcing the customer to pay. Many users can agree with this sort of trade-off especially if the ads are well made and do not appear as a sort of spam.

The first step

The iPhone has been the first device to open up new possibilities on the mobile front. Other hardware and software makers are following along, the most noticeable of which seems to be Google’s Android. As a result the level of competition and innovation in the field is dramatically increasing, which starts opening up interesting opportunities to both game and application developers and advertisers. New business models are being born and the end-user is receiving the most benefit as a result.

References

1. Au, W. J. (2009, 03 16). How To Make Money From iPhone Games. Retrieved 11 29, 2009, from Gigaom: http://gigaom.com/2009/03/16/how-to-make-money-from-iphone-games/

2. Dredge, S. (2009, 10 04). Alpine Electronics testing in-game iPhone ads with Fishlabs. Retrieved 11 29, 2009, from Mobile Entertainment: http://www.mobile-ent.biz/news/34929/Alpine-Electronics-testing-in-game-iPhone-ads-with-Fishlabs

3. Greystripe offering in game advertising on iPhone as well. (2008, 07 11). Retrieved 11 29, 2009, from Mobilegamefaqs: http://www.mobilegamefaqs.com/newsstory.php?id=1602&name=Greystripe+offering+in+game+advertising+on+iPhone+as+well+News

4. Monetizing iPhone Games With Advertising. (2008, 07 28). Retrieved 11 29, 2009, from Launchfeed: http://blog.launchfeed.com/monetizing-iphone-games-with-advertising