Implant ads are boycotted, what should manufacturers do?

Recently, there has been a big deal in the console gaming world.

According to media reports, Microsoft is launching a new game monetization plan that allows brands to place ads in free Xbox games. Ads will start appearing on Xbox as soon as the third quarter of this year. Just a week after the news, on April 21, another person familiar with the matter revealed that Sony also plans to insert ads in its own console.

Although neither Microsoft nor Sony has responded positively, gamers have clearly begun to accept this fact, as this is not the first time that advertising has been planted in console circles.

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In 2020, EA's fighting game "UFC 4" received a lot of bad reviews from players because of the large number of advertisements.

The places where the ads in "UFC 4" are implanted include the center of the venue, the game time bar, the replay of the wonderful shots, and the beginning and the end, and the implanted ads are almost everywhere in the game. UFC4, a full-priced game priced at $60, has been a forced ad-watch experience that has almost never happened to fully paying players. Many players said that EA's ability to add ads to full-price games has a strong impact on the gaming experience.

Subsequently, EA quickly removed the ads from the game after receiving feedback from players and apologized to the player community for the incident.

Why are console players so resistant to implant ads? You should know that in the mobile game circle, patch advertising is the most common advertising marketing method in mobile games.

But in the console game circle, "concentration" is a term often mentioned by console gamers, and choosing a host game means that players want to block all game interference from the outside world, such as removing the frequent friend interaction in mobile games, as well as the whole district network competition mode, so that players can better immerse themselves in the game world.

The appearance of untimely advertisements will seriously affect the immersion of players, lose the rhythm of the game and cause players to lose interest in the game, so inserting ads in the console game is a very dangerous thing. For players, console games can be said to be the "pure land" of gamers, who have difficulty accepting that they will still be disturbed by advertising after spending hundreds of yuan to buy a game.

Even so, console game manufacturers still haven't given up looking for a suitable advertising implant model. In 2021, foreign media reported that the US marketing company Simplmedia successfully implemented video ads in console and PC games after months of testing.

The company launched an in-game advertising platform called "playerWON", which uses the technology provided in the platform to allow game developers to access ads to games through APIs. They can then offer gamers a reward for personalized ads, and users can also decide whether to watch 15 to 30 seconds of video ads in exchange for unlocking exclusive game rewards. There are reports that EA is considering signing up with PlayerWON.

However, the EA spokesperson later denied the incident, and declared that the EA's current priority is still to provide the best gaming experience. It can be seen that "game experience" is the most unavoidable problem for console game manufacturers, and if this contradiction cannot be solved, it may be difficult for console games to achieve large-scale implantation of advertising.

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Unexpectedly, just one year later, the matter of installing advertisements in console games was once again put on the table, and this time because of the "support" of Microsoft and Sony, this matter seems to be about to become a reality.

However, unlike console game manufacturers, Microsoft and Sony, as game console platforms, their purpose is not so "naked". Sources say that the two major platforms have increased the advertising of console games to incentivize developers to make more free games. This is a good thing for the entire console game ecosystem, after all, in the current epidemic situation, the life of console game manufacturers is indeed not good.

Affected by the epidemic, news about the rapid growth of mobile games has emerged endlessly. Under this circumstance, the market for console games has naturally been squeezed, but more seriously, mobile games have occupied more advertising shares. Mobile game publishers have become very skilled in online marketing models, and in the context of companies in other industries cutting their advertising spend, mobile game companies have seized the opportunity to attract many players through advertising channels such as Facebook and Google.

And mobile games can more easily achieve CPI (consumer price index) and LTV (user lifetime value) two key indicators tracking in the model, for advertisers, during the impact of the epidemic, the attraction of mobile games is obviously greater, and most PC and console games do not benefit equally.

However, with the release and promotion of Microsoft's Xbox Series X and Sony PS5, this situation may change, because the next-generation gaming opportunities on both platforms contain huge marketing opportunities.

Console game platform updates are not frequent, but every console game platform update can have a profound impact on the game industry, especially the Xbox Series X and Sony PS5 have made qualitative leaps in the performance, technology and innovation of the console.

Different from mobile games, console game platforms bring irreplaceable experiences in two major aspects, one is a higher level of image communication, and the mature use of VR and 8K technology, which can bring a deep interactive experience that mobile games cannot achieve. It also means brands can achieve a clearer, more artistic, more innovative implant experience.

Console gaming platforms, on the other hand, can provide a more diverse home entertainment experience. With the improvement of technology and concept, the new generation of game consoles is not only a game device in terms of experience, but more like a comprehensive entertainment terminal for the whole family.

In addition to providing more and more "family-friendly" gameplay in the game genre, Sony and Microsoft's game consoles have provided massive streaming applications in the app store, making the console an integrated terminal for home entertainment. This also means that console game platforms expand the battlefield of game marketing to an increasingly wide range of home scenarios.

In addition to creating more marketing opportunities, the global sales of Xbox Series X and PS5 are also a big reason.

Sony's 2021 host game revenue reached 166.47 billion yuan, an increase of 35.7% over the previous year, while Microsoft's fiscal 2021 is a host game revenue of 101.75 billion yuan, an increase of 32.8% year-on-year, the two next-generation consoles have received huge attention in the world, and word of mouth has stabilized, which undoubtedly adds a lot of confidence to brand advertising.

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Microsoft and Sony did not respond much to the details of advertising implantation, but some news pointed out that Microsoft and Sony did not intend to get a share of advertising from it, but instead gave up the revenue to game developers. Whether paid games will be involved in the future is also unknown.

Most players are speculating that Microsoft and Sony may first test the waters with sports-type games, such as large billboard implants at the event site and advertising implants when purchasing items in the virtual store in the game. There is also some truth to this speculation, because adding advertising positions in sports games is very much in line with real life, which is the real experience of highly commercialized sports events, starting with sports games, players may be more receptive to advertising.

For game developers, the income from implanted advertising can not only share the cost of game development, but also make them profitable.

Over the years, the price of console games has not increased significantly, and the only few increases have changed with the release of a new generation of consoles. But at the same time, the development costs that game manufacturers need to bear are no longer comparable to those of a decade ago.

Morgan Stanley, on the other hand, conducted a survey in 2020 that even if only 45% of gamers choose to watch ads embedded in console games, the incentive console advertising market could reach $2 billion. And the CPM of an average of two ads per hour in the game is much cheaper than serving ads such as streaming services, with a minimum of $20.

Whether it is for game manufacturers or console platforms, such profits obviously have great attraction, and the long-standing console game implantation advertisement may eventually become a reality.

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For this matter, the player's feelings may not be very good. As mentioned earlier, it remains unclear whether the contradiction between implanted ads and the gaming experience can be effectively resolved.

Although there was no positive response to the matter, a Microsoft spokesperson had the same statement: "Microsoft is always looking for ways to improve the experience for players and developers, but we don't have anything further to share." It can be seen that the game experience is still the key to solving the problem at present.

In addition to this, there is another issue that players are concerned about, and that is privacy.

The two consoles are well aware that this move could anger many players who don't want to see ads in the game, so the project is very cautious. However, if you want to achieve a better game experience in the situation where advertising and games coexist, this requires the platform to strictly select brand advertising, accurately deliver the right players, and the platform and game developers are bound to build their own advertising private domains, so the user's privacy problems are naturally put in the first place.

It is worth noting that Microsoft's layout in this regard has begun to launch. In December, Microsoft spent $1 billion to acquire AT&T's Xandr advertising business unit. In response to this acquisition, Microsoft has said that micro, in the post-cookie world, need to respect consumer privacy preferences, so they choose Xandr, which shares a common vision with Microsoft and can complement each other's products, to strengthen the ability of open networks.

At the beginning of this year, Microsoft also frequently exposed the intention to acquire the network security software company Mandiant, although it was eventually successfully acquired by Google, but Microsoft's trend in strengthening network security and user stability has attracted special attention, and now it seems that Microsoft may really be paving the way for the implantation of advertisements for console games.

In response to the same problem, Sony also said that it will strictly review the advertising input, mainly to avoid advertisers and game manufacturers from collecting players' personal information.

Although it is ultimately not known what form the console platform will implant advertising, it may only be a matter of time before the console game advertising form is innovated, and whether it can balance the game mechanism and protect the player experience is the key to the benign operation of the console game commercialization ecology.