In 2016 in-game advertising (IGA) grossed over $7.2 billion dollars. The newest, and by far the most popular type of in-game advertising is dynamic in-game advertising (DIGA), which allows advertisers to purchase ad space inside of video games that can be implemented, updated, or changed in real-time. This means that logos turn up anywhere inside a game environment where they might strengthen a brand. The advertisements appear on virtual objects such as billboards, posters, and bus stops or are highly integrated within the game so that the advertised product is necessary to complete part of the game.
Another type of IGA is static in-game advertising where advertisements are planned and integrated into a video game during its design and development stage. For example, static ads can be integrated into the storyline of a game. This is great for brands that are trying to reach a global audience because the ads are not geo-targeted but not ideal if the ad is part of a time-sensitive campaign.
Several academic studies have shown that players' reactions to the ads are based on the location of ads in a gaming environment, the product's involvement in the storyline, and prior game-playing experience.
Advergames are another form of IGA where brands can build custom video games with the sole purpose of promoting their brand or product. The main advantage is the ability for a brand to build a fun and positive connection with their customers.
Although the advertising industry has largely embraced IGA as an effective way to reach their target audience, viewer numbers are still hard to estimate because it is difficult to gauge the popularity of a game before its release. With the rise of freemium games (games that are provided free of charge, but players are charged for additional features, services, or virtual goods) developers are learning to balance gameplay, controls and advertisements in order to continue to produce high-quality gaming content.
Overall, IGA has created new revenue streams and in some cases publishers’ profits have increased by an extra $1–2 per game unit sold. Some publishers see IGA as a way to offset growing game development costs, while others believe IGA will allow them to experiment with gameplay by reducing the financial risks associated with game development.
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