Blog Post

Videogame Ad Spend To Hit $1 Billion By 2012: eMarketer

No slowdown for videogame advertising, as companies spent $502 million on all videogame-related ad efforts, according to eMarketer, which expects the category to rise to $1 billion within five years. The researcher projects that U.S. in-game ad spend will increase from $295 million in 2007 – a year that saw the success of games like Microsoft’s (NSDQ: MSFT) Xbox 360 game Halo 3 and Viacom’s (NYSE: VIA) Guitar Hero and Rock Band – to $650 million in 2012 – a 120.3 percent increase. For this year, eMarketer is anticipating a rise of 36.6 percent to $403 million.

Secondly, eMarketer expects even higher growth for web-based games, including sponsored sessions and display ads in or around the online game space, with expenditures soaring 133 percent between 2007 and 2012. In particular, eMarketer finds that while console games will rise 91 percent by 2012, the real driver of videogame ad spend will come from casual and online games. The report points to lower costs and the ability to easily insert and update a variety of different kinds of ads. For another, the numbers of players who use an internet connection with consoles like Xbox Live are likely to remain fairly limited. Lastly, the absence of a definitive standard ad model will continue to hold back spending, at least for the next year or two.