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Episode 99 of The Instance included an interesting news item regarding an interview with Activision CEO Robert Kotik.

Electronic Arts has already announced that they are developing a new version of their ‘battlefield’ series: Battlefield Heroes. In a way that has worked out well for them in the asian markets, this version of the game will be free to download, and will generate money both through in game advertising and ‘micropayments’ for items. The indication is that Blizzard (or Activision Blizzard) are looking to do the same in their products.

Naturally, people are worried that they will soon be seeing ‘Coca Cola’ potions in World of Warcraft.

A strong argument against in-game advertising is that it feels out of kilter with the world in which the game is set. Granted, in a fantasy roleplaying game, an advert for a computer manufacturer would look out of place - but what about a game based on Blade Runner - would anyone even notice the glowing neon Atari signs? What if they were Apple iPod logos? The two companies are not that dissimilar in the view that they are household names, albeit 20 years apart.

In-Game advertising and sponsorship is not a new idea, we have seen more and more licensed products in computer games as the push towards realism continues. The first version of Geoff Crammond’s Grand Prix featured the coloured liveries of the F1 cars, albeit without any logos or names on them. Despite this, the distinctive Marlboro McLaren was easily recognisable with it’s Marlboro Flash on the nose and wings. By the time Grand Prix 2 was released, graphics had improved to the point where actual sponsors logos were displayed on the cars. Game modders even took this one stage further, replacing the censored cigarette logos with the real logos to make the game more authentic.

Sports games have probably pushed in-game sponsorship the furthest, as their real-life counterparts also rely heavily on sponsorship. From John Madden NFL to Tiger Woods Golf, where you can even play with Nike balls (complete with Nike swish).

However, sports games are not the only genre to feature commercial tie-ins. In the UK, The original Theme Park game was sold with a tie-in with Midland Bank (Now HSBC) and their LiveCash accounts, aimed at the teenage customers that would also buy the computer game. In-game branding included the Midland logo on the title screens and the year-end statements displayed as “LiveCash” statements.

Quite how successful this was in attracting new customers to Midland Bank is hard to measure, but it is interesting to note that the branding was missing from the port to the Nintendo DS.

EA have stated that in addition to displaying advertising (although apparently not during gameplay) they will allow players to purchase cosmetic upgrades to their characters. These upgrades would apparently not provide any advantage to players.

It is a fine line that game manufacturers tread, particularly in online multiplayer titles. If players are allowed to purchase upgrades to their online presence, there is a risk that a game will get dominated by the rich. MMORPGs have been plagued by ‘gold sellers’, who allow the purchase of virtual gold and items by paying real-world cash for them. Ignoring the ethical arguments around this, it places players with more disposable income in a position where they can gain an advantage over their peers. The only reason gold sellers exist, is because there are at least some people who are willing to take this advantage.

If the only upgrades I could get for my avatar were cosmetic, why would I be tempted to purchase them? If we don’t purchase them, then the profitability of a title goes down, EA will seek to gain more revenue through advertising, and advertising becomes more intrusive, which again puts people off.

If in-game advertising is to work, its success would be in its non-intrusive nature. If all of a sudden the reward for completing a level was a ‘mission complete’ screen with gaudy sponsorship plastered all over it, you would be less than impressed, and the game reviewers would slam the game, accusing  the developers of selling out.

However, what if you had completed a tricky song on Guitar Hero, what if there was a web link where you could download that song directly to your XBox, DRM free, so you could copy it to your iPod? What if after completing a movie-tie-in game, you could download that movie to your Media Centre? What if a discount was offered over the standard DVD or download price? At that moment of elation, you are more susceptible. That is when the advertisers want to pounce. Once you leave the game environment, your attention starts to waver, and you lose interest.

I’m not saying that model will work for everything - a musician in the World of Warcraft Brewfest event would probably not be able to entice you to pay to download an album’s worth of music, and perhaps there are some game genres that could never be seamlessly integrated with advertisements, but do we not already have in-game advertising, and the next step is to make it interactive?