A few days ago, an analyst from a very good research firm asked me what were my thoughts on Google entering the casual game market.
Here is what I answered at that time and, a fews days after came the announcement made by Google... it seams that I was not far...
The answer I made to the analyst:
As a general comment, I would say that Google is, for now, entering the casual game space by the advertising door only. It appears to me that they don't try to develop a gaming portal (ala MSN or Yahoo Games) even if they have integrated games when you are registered with Google.
Is it gonna stay like that? Probably for a certain time, I don't see Google buying and/or creating content probably until mid 2008 or even longer.
On the other hand, the acquisition of YouTube showed that Google can acquire technology, traffic and content (to some extend as the YouTube video does not belong, perse, to YouTube).
Also to take into consideration:
- With a market minimum of hundreds of millions of casual gamers, there is room for many companies to succeed on a large scale. Current estimates say there are 250 million regular casual gamers, but the market potential is for billions of players
- The increasing recognition of the importance of casual gaming throughout the industry (as seen in the President of EA's comments at E3 as well as the more casual-gaming-focused nature of this year's event in general) will continue to drive the industry forward
- Google is a catalyst for driving market awareness. If Google does enter the casual games market, we think even more people will look to try casual games and they'll get hooked.
However, Google's expertise is search and advertising, not casual games. As a result, I see Google's entry into the market as having the ability to further raise the profile of the casual gaming industry, and this will be a big positive to companies like Cafe.com for whom casual gaming is a core competency.
On the advertising side, I think that Google's entry into in-game advertising is an extension of their core competency into an emerging area. Game advertising is a fairly new medium, and the whole ecosystem of advertising is currently adapting. Like casual gaming in general, there is a lot of room for market growth and a great potential for the large-scale success of many companies.
As you know, Boonty is not into "in-game' advertising. Instead, we have "around-game" advertising as well as sponsored games and game items. We do not want to disturb the game experience. However, I think that if Google can deliver relevant advertisements in a way that doesn't interfere with game play, consumers won't mind it. They may even welcome it due to relevance or context.
And off course, integration of Adscape into Google's main ad network may well provide more monetization opportunities for online casual game companies like Cafe.com.
As an FYI: Some interesting recent figures regarding game advertising:
- EMarketer forecast that spending on in-game advertising would almost double between 2007 and 2011, going from $1 billion to $1.9 billion.
- Parks associates estimated game advertising spending in the U.S. will grow from $370 million in 2006 to more than $2 billion in 2012 (with dynamic in-game advertising in PC, console, mobile, and casual games estimated to grow from 27% of the in-game advertising market in 2006 to 84% in 2012)
- IGA's CEO estimates that only bout 10 - 15 percent of games now take advertisements
Now the article relating Google's position:
Google's appearance on the agenda at the Casual Connect game convention in Seattle this week no doubt made people wonder about the extent of the company's plans in the industry. So Google's Bernie Stolar, a video-game veteran, addressed that question at the outset of the company's session today.
"I'm going to be very clear right now," Stolar said. "Google is involved in in-game advertising. I'm going to say it one more time, in case there's any misconceptions here: in-game advertising. This is an area that Google believes will have tremendous growth over the next number of years. ..."
"No Gbox, Bernie?" asked Google's Greg Schaffer, playing along.
Nope, no plans for a console, Stolar said. And no "Google Live," no video-game portal, and no video-game search, he said. Later, Stolar reiterated, "We are not going to be a publisher or a developer or a portal for games, at all. That's the jobs of everybody here. That's why we want to partner with you."
OK, we get the message. But what Google is doing in video games is still pretty interesting. Among other things, it gives Microsoft and its team from Massive some serious company in the video-game advertising market.
Specifically, Google outlined plans for "AdSense for Games," applying concepts from its existing AdSense program to video games.
That means game publishers will be able to use the Google system to put advertising in their games, and advertisers will be able to work through the Google system to buy ad space within games. Schaffer said it will start with ads in Web-based games, with plans to move into PC and console games later on.
During the public session, the Google team didn't show examples of what the ads will look like, telling the attendees to contact the company individually. Later, Google product marketing representative Eva Woo said the ads will be both video and text-based. Asked when the system will be rolled out, Schaffer said, "soon."
Although the Wednesday session provided new details about Google's plans, the company's intentions to enter the market have been apparent since its acquisition earlier this year of AdScape Media, where Schaffer was vice president of sales and Stolar was chairman.
Source of the article: Seattle PI
Technorati Tags: boonty, cafe.com, games, Microtransactions, MTX, Romain Nouzareth
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