The gaming industry was probably the most successful and most receptive in terms of creating and benefiting from a newfound emphasis on mobile and online opportunities. The ease in which social networking and gaming meshed together seemed like a sweet spot for advertisers to gain some traction on a dynamic and growing demographic.
The popularity of Facebook helped to launch some very simplistic online games into overnight sensations. Games like FarmVille and Zynga Poker have millions of monthly players. Poker has been an online game for years, but once the game became socially active, it picked up millions of users that may have never been interested in the game before. But like many things in popular culture, the intense excitement of Zynga’s games, Words with Friends, CityVille, and recently acquired Draw Something, have seemed to cool down.
Cowen analyst Doug Creutz says the social gaming company’s daily active users declined by 8.2% last month, which marked the second straight month-over-month drop. “Nearly all of the company’s major titles declined significantly,” he said. As the use of the most popular games continue to decline, so does their mobile ads views. With a decreasing number of eyeballs to feed ads to, Zynga’s shares have also taken a hit due to investor worries about the dissipating user base.
Creutz goes on to say that “we now additionally believe that interest in Facebook-based gaming may have reached a negative inflection point,” as users gravitate toward mobile platforms.
Similar to the problems Facebook is currently having with its more popular mobile version, Zynga and other gaming companies are struggling to provide a sustainable method of producing engagement quantifiable enough to appease advertisers.
And when it comes to console based ad models, the solutions are even more evasive. Although Nintendo’s Wii, Microsoft’s XBOX 360, and Sony’s PlayStation 3, are played by millions of people online and offline, the game creators for the consoles have a tough time selling what they believe to be prime real estate.
“We’re looking to move from being a packaged-goods company to a media company,” says Dave Madden SVP, global media solutions at Electronic Arts at the company’s Electronic Entertainment Expo (E3). With hugely popular titles like Madden 13’ and FIFA 13’ EA is looking to move beyond the simple in-game plastered across a virtual sideline or billboard. There is no type of engagement like the video gaming industry has, and they hope to use that to their advantage. Unlike Zynga which doesn’t really incorporate their ads into the actual gameplay, EA is looking to create worlds so real, the advertising inside would feel like it was part of the game.
Much like Jeep Wrangler did with the much anticipated release of Call of Duty Modern Warfare 3, co-sponsoring the launch and becoming the official vehicle of the game, EA hopes to embed more brands seamlessly into their games and build a brand association that goes beyond just visual input.