Video Games Will Generate Nearly $260 Million in Advertising Revenue by 2008
Forecasts hint at video games becoming the ultimate advertising tool for marketers.

by | October 18, 2004

As marketers diligently search for alternative advertising vehicles to attract fickle customers, a recent report from Yankee Group, a communications/market research company, hints at video games offering the most ideal potential.

Currently the video game industry has established a mass market comprising more than 108 million gamers 13 years and older in the United States who spent $7.4 billion on video games in 2003. By 2008, this market will grow to more than 126 million gamers 13 years or older, generating in excess of $8.3 billion in revenue.

"Surprisingly, given the size of this market, video games have largely been ignored as a platform for advertising," says Michael Goodman, Media & Entertainment Strategies senior analyst. "In 2003, marketers spent a paltry $79 million on in-game ads and advergaming. Even if we add in the $450 million to $550 million spent advertising on game-related web sites, this pales in comparison to $42.4 billion on broadcast TV advertising."

"That is about to change as advertisers realize video games are effective platforms for reaching consumers with their marketing messages. In this report, we examined video games as a marketing vehicle and how advertisers can take advantage of this opportunity," says Goodman.

While traditional advertising media is losing its effectiveness, new opportunities such as video games are presenting themselves to advertisers. With more than 108 million U.S. gamers 13 years and older, video games represent a significant opportunity to reach consumers. Further, gamers tend to be receptive toward advertising.