IGA Worldwide Signs Activision

IGA is now the exclusive partner for the world's two biggest game publishers on the Playstation3 platform. A couple of months after announcing a multi-year exlusive deal with EA on the PS3 platform, IGA did it again today by adding Activision. Now it is well positioned in the console in-game advertising space against Massive (Microsoft). Advertisers interested in running ads in some of the most popular games can deal with just two companies, Massive on the Xbox 360 platform and IGA on the PS3 platform. Both companies also address the PC platform as well. The upside potential for PS3 as an ad platform is great. Our forecast shows that the connected base of PS3 will eventually surpass that of Xbox 360 in the next five years. Although Playstation Home is not yet open for third-party ad serving companies, PS3 is a great console for sports, adventure/action, and shooter games, the best genres for in-game advertising. This partnership definitely helps solve the platform fragmentation issues and makes their buy-in decisions easier. According to Justin Townsend, IGA's CEO, the company is seeing much bigger average ad-buys now, frequently in seven figures.

Rumor says that IGA Worldwide paid a handsome upfront guarantee to EA in order to strike the exclusive deal. Neither companies has confirmed that. However, if the rumor was true, the new deal with Activision probably carries similar terms.

With both EA and Activision in its backpocket, IGA will aggressively pursue other major publishers. Double Fusion, which has Ubisoft, 2K, THQ, Midway, Eidos as clients on the PC platform and a partnership with Sony for advertising on the PS3 platform, must be feeling some pressure now. Although the company has diversified into casual games and won several key clients on the PC platfrom, including NHN and NCSoft, core console games remain important. Double Fusion has to make a couple of big announcements of its own to prove it's still a viable competitor on the PS3 platform.

Amobee gets new funding

Another interesting news is that Amobee got some new money, along with a strategic partnership, from Telefonica. Vodafone is another mobile carrier that has invested in Amobee. Amobee focuses on mobile advertising and got its start in mobile in-game advertising. Unlike the other companies in the space like Greystripe and Hovr, Amobee focuses on the carrier channel. It wants to convince mobile carriers to complement some of their premium downloadable mobile games with ad-supported or subsidized games.

I certainly see the potential of mobile advertising and mobile in-game advertising but I also have some reservations because of the consumer data I have in hand. I'm busy crunching data for my upcoming mobile gaming report titled The New Frontier: Portable and Mobile gaming. What I found is that a fairly large percentage of mobile users don't want advertising on their mobile phones, period. Further, heavy mobile gamers and mobile gamers who are already paying for their downloads are more interested in ad-supported free mobile games. Therefore, if mobile carriers want to use ad-supported mobile games to attract new gamers to the market, it won't be an easy task. They'll need to educate the market about the availability of such games first, and the mobile phone deck is not the ideal place. Carriers will have to leverage online channels, which provides higher visibility for such games. Also, in order to not cannibalize potential revenue from game downloads, they'll have to differentiate the premium offerings from ad-supported content through windowing or other tactics. Amobee's approach, subsidizing the game instead of making games totally free, is another alternative.

Those are just some quick thoughts and now I'll need to switch my focus to the Discovery channel, which is showing another episode of "Rise of the Video Game". What a great program!