Sony Introduces Loading Screen Ads

While catching up on some video games this weekend (folks, it’s all part of the job), we noticed Wipeout HD has a few extra features of note for potential advertisers.

During the game’s loading screens, a small rectangular video started playing with designs that looked like they fit in with Wipeout HD’s sleek, futuristic styling.  We didn’t even know it was an advertisement until the State Farm logo appeared promoting their site and a way to save moolah.

Now Sony and Double Fusion are talking about how deep these integrations are going, with Wipeout HD declared a pilot program for future endeavors.

From IndustryGamers: {link no longer active}

“By introducing high-resolution dynamic video ads into WipEout HD, Double Fusion is responding to advertiser demand and offering an engaging ad format while pushing in-game ad innovation to a new level,” said Jonathan Epstein, CEO of Double Fusion. “The title is one of the most popular and visually stunning available on the PlayStation Network and a perfect vehicle to connect advertisers to a captivated audience. It comes as no surprise that advertisers have already signed up for WipEout HD even before the launch of the new video ad units in the game.”

The integration we saw over the weekend was actually probably one of the least-offensive in-game campaigns we ve ever seen.

The design very closely follows the game s futuristic tones, and the ad didn’t take place during the game, but in between the necessary loading screens all gamers are used to.  Additionally, we think that’s the perfect time to try and engage the audience as those loading screens make gamers literally a captive audience.

Let s see how the high-definition integrations look, and we promise to have our iPhone ready to take video of when it does happen.

Chevy Volt Coming In At $40K?

Beware, Chevy, the lessons of Sony.

When the Chevy Volt was first shown off as a concept car in 2006, it was hailed as the future of the American auto industry.  The combination of high technology, lower gas consumption and a price of around $20K looked to be the perfect storm to take on Toyota and the Prius.

Fast-forward a few years later and that $20K has doubled to around $43,000 for a Chevy Volt.  From Ad Age: {link no longer active}

The Volt’s retail base price will be about $40,000, the person familiar with the program said, because “dealers need a couple thousand reasons to pick up the phone and order one.” That means that GM will sell the Volt – at a loss – to dealers for somewhere in the mid- to upper $30,000s. Transaction prices, the source said, are projected to average about $43,000.

For those in the video game industry with a keen eye at this generation s console wars, the story can’t help but remind people of the PlayStation 3 launch.

High technology also came at a tremendous cost to Sony, with some estimates pegging the actual cost of each PS3 at $800, far below the MSRP Sony placed on the PS3 of $599.  Sony wouldn’t make a profit on any hardware sales for quite some time.

Let’s continue with the parallels.

GM needs to do more than cross its fingers on warranty costs, though. At $40,000-plus, the Volt will be a tough sell in a Chevrolet showroom. By comparison, the Prius starts at $21,750, including shipping — putting it in a similar price range to other Toyota cars shoppers may be considering.

Unfortunately, the original PS3 price of $599, even with Sony taking a loss, was absurdly high for most consumers.  Sony’s main competition, the Xbox 360 and Nintendo Wii, both came in at a couple hundred dollars less.

So what s GM to do   Looking to the future…

That leaves GM with an urgent need to cut costs on the Volt. Dave Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich., estimates that in five to 10 years, technological advances could cut the cost of the pack in half, to about $4,000 to $5,000. With those and other savings, GM might get the base price down to $30,000, Mr. Cole said.

Chevy can take solace in recent reports showing Sony has managed to reduce PlayStation 3 costs by about 70 percent.  The estimated cost of each unit is $260, a far cry from the bath Sony was taking on the $800 cost just a couple of years ago.

Unfortunately for Sony, those couple of years have been enough to see one competitor bolster its Xbox Live online offering in very engaging ways that will (by our account) lead to unprecedented consumer loyalty in gaming, and the other competitor come back from the dead to be the market leader with the Nintendo Wii.

No amount of marketing dollars has helped Sony make any clear run at either competitor, so at the end of the day, more often than not, it’ll come down to the product and its price when looking for success stories.  Those are the foundations that marketing can then take advantage of, but if they re not there, can marketers really do their jobs effectively?

Sony PlayStation 3 Costs Reduced 70%

Sony’s PlayStation 3 used to cost Sony over $800 to make, leading to a loss on each unit sold.

Video games is a razor (console) and blades (software) business so Sony was willing to take that loss on the initial launch, but recently Sony has said it s made significant strides in reducing the cost of PS3 so now they’re making about a $140 profit on each $400 unit they sell.

From TVG: {link no longer active}

The cost reduction since we introduced the PS3 is very substantial and this is on schedule, Oneda-san replied when asked about manufacturing costs.  We don’t disclose how much of the PS3, specifically the cost deduction was achieved during the past two years.  But that is on schedule.

About 70 percent, roughly speaking, Oneda-san added when pressed further on the matter.

Unfortunately for Sony, PS3 is still being outsold by the nearly-ten year old PlayStation 2, so isn’t it time for Sony to put that profit towards a price cut and move some additional units before it loses any footing it ever had in the industry

Yes, it’s that bad.  Price cut by September, please.

Valve Responds To Racism Claims

A recent Houston Chronicle blog post accused Valve of being insensitive in setting their newest zombie game, Left 4 Dead 2, in the city of New Orleans.

Set in New Orleans, players will have to fight their way through hordes of zombies – with several of them who appear to be African-Americans. When I saw the first trailer for the game, all I could think about was Hurricane Katrina and the aftermath. Setting the game in a city that was scene of dead, bloated bodies floating by so soon afterward was a bad call, IMHO. The city has had enough to deal with — Valve, you should have spared them, even if it’s just a video game.

Valve recently had a chance to respond in an interview with game blog Destructoid:

“Utter insanity,” said [Left 4 Dead writer Chet] Faliszek. “There are mixed races of zombies, there are all different races of zombies that you shoot, and since we placed it in New Orleans, that makes it racist I honestly re-read the paragraph about five times … but when two of the characters in your game are African-American, it’s a weird thing to be accused of. We’re like, ‘how does this work’

“As far as Katrina goes, if you go down to New Orleans, Katrina’s still going on. I mean, it’s messed up, it is crazy that the city is still in the state it’s in, and we treat that with the utmost respect,” he added. “Our CEDA thing is not some subversive commentary on anything. This is a videogame, those are real people’s lives, we are not trying to make a statement with that. It’s a place we love, it’s dear to our hearts. We would not cheapen it. It’s not a brick-for-brick representation of New Orleans; it’s a fictional version, and I love that city.”

We’d like to extend the offer of a free beer for both the Houston Chronicle write and the Left 4 Dead writer to hash out our differences and maybe even play a few games.

Our stance?   Let s just say, if a zombie’s coming after me, I’m probably not going to care what race he is while he’s noshing on my foot.

I think we can all come together, all races and creeds, in agreeing on that immutable fact.

Gamestop Goes Casual

Gamestop recently unveiled a new casual games section, kicking off the new push with over thirty games marked down by 50 percent off their regular price.

Casual games have been increasing in popularity and profitability over the past few years, and this explosive growth, coupled with stagnation in video game sales, paved the way for Gamestop’s expansion.

“As the leading video game and entertainment software retailer, we continuously look for ways to bring our passion for gaming to the customer visiting us online,” said Tony Bartel, executive vice president of merchandising and marketing.

The Gamestop destination also features an editorial blog named The Casual Lounge, and trials of several hundred games.  After seeing Nintendo s and Sonys depressing numbers from earlier this week, we don t blame em.

[Gamestop Casual]

Xbox Avatars Are Now Rock Stars

Guitar Hero 5 has been making the rounds lately, with everything from a nudity-heavy viral video to Bill O’Reilly bemoaning said video.

Now Activision is lightening the mood with their latest trailer, showing how Xbox 360 avatars are going to be the star of the show in the newest Guitar Hero game.

As more publishers integrate their games with centralized experiences like avatars, we see a market developing even more for these kinds of microtransactions or branding opportunities.

How long before we see a Pepsi shirt on your lead singer, or the band arrive in a VW Routan?   The more players are accustomed to identifying themselves personally in their gaming, the easier it’ll be for advertisers to get their buy in when it comes to virtual goods like this.

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The Next Big Thing: Augmented Reality

From AdWeek: {link no longer active}

In essence, [Augmented Reality, or AR] holds the promise of marrying the digital and physical worlds by taking complex data and overlaying it with views of the real world via Webcam technology and multiple screens.

“The last thing I can [recall] getting this much hype is Second Life,” said Matt Szymczyk, CEO of Zugara, a Los Angeles-area digital agency. “But I think there will be more practical uses to this.”

Did you know video games are already ahead of the game in bringing AR into living rooms   Several games like Sony’s EyePet and Microsoft’s Project Natal games aim to bring users into the game, from their face to their movements and more.

These games also want to use everyone s living rooms as part of the game space.  So are we going to see some innovative ways to have sponsors take advantage of this new technology

What about having virtual products placed in people s living rooms, maybe as bonus items that users have to grab to affect the game.  Or how about the ability for a user who, say, is drinking Diet Coke, to have that can recognized by the game and used to unlock special game content

The possibilities can really open up here, and we re looking forward to creative solutions to this.  To show you how far ahead video games are in this field, take a look at this Engadget demonstration of the PlayStation 3 game, EyePet, due out later this year.

{link no longer active}

Video Of The Day: Why Everything Sucks

Today’s video of the day deals with everything, and why everything sucks.

If you’re tired of the focus and attention given to today’s youth market, this is just the medicine you need.

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In-Game Ad Budgets Increasing

From eMarketer:

By 2013, marketers will spend a total of $681 million on in-game advertising, up from $403 million in 2008, per eMarketer. During the forecast period, the relative mix of console/PC-based and Web-based advertising will shift slightly toward the latter, with 75 percent of the total spent online in 2013.

eMarketer has an interesting theory regardiung in-game advertising that, while console and PC in-game advertisements will continue to grow ($117 million in 2008 versus a projected $170 million by 2013), browser-based games will show a larger increase of its share ($286 million in 2008 to $511 million in 2013).

They point to the increased acceptance of gamers playing free games in exchange for exposure to advertising, rather than the slower acceptance of seeing ads and product placement in console games they’ve already spent money on.

After playing the free 1 vs. 100 on Xbox Live, we have to wonder if they jumped the gun here.  The free-to-play game show has ample advertising from Sprint and Honda, and is now the #7 game being played on Xbox Live.

Not only are the advertisers presented in a way most browser-based games are incapable of doing, but the robust experience has already made this game show crack a top ten notorious for its hardcore Call of Duty, Halo and Gears of War mainstays.

Music Games Are A Fad

From IndustryGamers: {link no longer active}

Media giant Viacom has announced its fiscal results for the second quarter ended June 30. From a game industry perspective, the most interesting aspect of this of course ties into MTV Networks, which publishes the popular Rock Band franchise from Harmonix. Sales at the Media Networks division (home to MTV Networks) dropped 8 percent for the period to $1.97 billion. The cause Viacom put most of the blame on “a 41 percent decline in ancillary revenues driven by lower sales of the music video game Rock Band.”

If you thought music games were anything but a fad, you may want to think again.

Music games like Rock Band and Guitar Hero are already down over 30 percent worldwide, and companies like Viacom and Activision are scratching their heads wondering why their golden goose is feeling sick.

We have a couple of reasons:

Rock Band 2 and Guitar Hero World Tour were just not that different from their originals, so why bother upgrading, especially if I can download all the same tunes anyway?
– Gamers are probably feeling a bit burned as they head to Gamestop to trade in their plastic instruments in hopes of upgrading to newer ones, only to find their $100+ purchases reduced to $2 prices.

Can anything stop the bleeding Activision is pinning its hopes on the upcoming hip-hop focused DJ Hero, complete with turntable, while MTV Games is hope The Beatles Rock Band makes the Harmonix deal well worth it.

Time will tell if gamers have already changed their tune. (See what I did there )