You’re about see a lot more ads in video games

There’s nothing the video game world loves more than a good argument, and the rumored rise in interest in in-game ads on the PlayStation (and maybe Xbox) could be the industry’s next tempest in a teapot. 

Sony is reportedly working on a plan to put ads into titles on its platform, borrowing heavily from the model that has been so successful in the mobile gaming world. The goal of the initiative, reports Insider, is for the ads to be integrated into the games, such as appearing on digital billboards in a sports stadium. 

The decision on whether to include ads will apparently be up to the developer, meaning you’re less likely to see a promotion for Mountain Dew or Takis in big, AAA titles like Call of Duty or God of War. But smaller, independent games—especially those that utilize the free-to-play model—could embrace the ads.

In-game advertising has been a hot-button issue in the core gaming world for more than two decades. In 2002, Simon & Schuster Interactive published Darkened Skye, a 3-D action fantasy game that featured a lot of what players expected in these games at the time: Ancient worlds, nefarious enemies, and buxom heroines. But it also had some blatant product placement, requiring players to collect Skittles candy to gain mana. The entire game was set in worlds depicted in Skittles commercials at the time.

Even more surprising? Darkened Skye got decent reviews, despite the barefaced product placement.

Three years later, Sony pushed the envelope a bit further, letting players of EverQuest II order a real-world pizza from Pizza Hut in-game by simply typing “/pizza.” That promotion went over about as well as you might expect. And in 2010, action-adventure game Alan Wake was loaded with brand-name products, including Verizon, Ford, Duracell, and Energizer, earning the scorn of players, who felt the product tie-ins were a little too forced and obvious.

So why the current resurgence in interest? As you might expect, it comes down to finances.

Free-to-play games generated revenue of $98.4 billion worldwide in 2020, according to SuperData’s year in review report. Of that, $73.8 billion went to the mobile market. The console world saw just $1.8 billion.

Sony, says Insider, hasn’t yet decided whether it will take a cut of any ad revenues. Microsoft, late last year, acquired AT&T’s adtech firm Xandr, which could let it also explore the in-game ad space, though it has not made any announcements on that front.

While players often have a knee-jerk reaction when they hear the term “in-game advertising,” the practice has proven quite successful. For example, after debuting its Bing search engine in June 2009, Microsoft promoted the Google competitor in a series of games, including NBA 2K10 and DJ Hero. After their first exposure to the ads, the percentage of gamers visiting and searching Bing increased by 108%, according to Microsoft at the time. In fact, two-thirds of the gamers who visited Bing after seeing the ad were visiting for the first time.

Of course, game purists who insist that advertising has no place in gaming likely don’t realize many of their favorite titles already include it. Marvel’s Spider-Man: Miles Morales was the sixth best-selling game of 2021, but, as spectacular a title as it was, it’s still ultimately a collaboration between Sony and Disney to promote the Spider-Man franchise. And Fortnite has seen tremendous success incorporating Marvel characters, as well as cross-promoting ones from other game franchises—and getting players to pay for those skins.

The trick to preventing a backlash among players comes down to two things: Moderation and contextual placement. The ads have to make sense. Seeing banners for real-world products in a stadium during a Madden game isn’t all that different from a live NFL game, but players exploring a mysterious world in another galaxy generally don’t want to stumble upon a 7-Eleven.