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December 19, 2005

Major Videogame Maker THQ To Carry Internet Ads

Courtesy of TechWeb News

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Videogame maker THQ Inc. on Monday said it has agreed to carry in its games ads delivered over the Internet by Massive Inc., a deal that reflects the industry trend towards building an online advertising model for videogames.

The deal is important because THQ, based in Agoura Hills, Calif., is the first major videogame publisher to agree to start carrying Internet-delivered advertising. The game maker, whose popular titles include "SpongeBob SquarePants" and "World Wrestling Entertainment," did not disclose financial details.

New York-based Massive is building an advertising network of videogame makers who build games for the PC and other Internet-connected devices, such as Microsoft Corp.'s Xbox or Sony's PlayStation. The company, which launched in October 2004, says it has partnerships with 29 publishers, and more than 60 advertisers, including Coca-Cola, NBC, Nokia, Panasonic and Paramount Pictures.

"We are excited to team with Massive because we believe their network strategy and sensitivity to game play will deliver value to publishers, advertisers and gamers," Kelly Flock, executive vice president of worldwide publishing at THQ, said in a statement.

In-game advertising has been gaining momentum among publishers as a way to offset the high cost of development of next-generation games, Anita Frazier, analyst for The NPD Group, said.

"With development costs escalating, in-game ads offer publishers another way to make money, outside of pure retail sales," Frazier said.

Videogames offer advertisers the ability to reach mostly males between the ages of 18 and 34, a prime demographic that's difficult to reach because they tend to watch less TV than other age groups.

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