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Microsoft plans to buy video game ad firm: paperWed Apr 26, 8:48 PM ETLOS ANGELES (Reuters) - Microsoft Corp. (Nasdaq:MSFT - news) plans to pay $200 million to $400 million for Massive Inc., a privately held company that places ads in video games, the Wall Street Journal said on Wednesday.The deal to buy the two-year-old company highlights the increasing importance of advertising in nontraditional media.A Microsoft spokeswoman said the story is based on rumor and declined comment. A spokeswoman for Massive also declined comment.Clients of Massive, which uses always-on Internet connections to place real-time ads in games, include Coca-Cola Co. (NYSE:KO - news), Honda Motor Co. Ltd. (7267.T) and other advertisers that are boosting spending for ads in video games.There are high expectations for in-game advertising, because it offers the promise to again connect advertisers with the desirable young male audience, which has been abandoning television and other traditional media in favor of the Internet and video games.In an interview with Reuters in December, Massive Chief Executive Mitchell Davis said forecasts from a variety of industry sources call for real-time game advertising revenue to grow into a $3 billion-plus global market by 2010.The new generation of in-game ads offered by Massive and rivals like Double Fusion allow advertisers to run campaigns for specific periods of time, rather than buying a slot that is hard-coded into a game. That means billboards and storefronts in games can change over time to more closely resemble the real world that some games attempt to recreate.Double Fusion board member and spokesman Jonathan Epstein told Reuters that the deal would "confirm the inevitability of the in-game ad market" and set a price benchmark for similar acquisitions that may come in the future."It's very good news for us," Epstein said.Video game publishers, who are struggling with rising game development costs, hope that in-game advertising will come to represent a meaningful source of revenue.Microsoft, which already runs a large advertising business around its MSN Internet unit, has won over gamers with itsXbox Live service that connects gamers to the Web through its Xbox and newer Xbox 360 consoles.In an effort to close the gap on online advertising leaders Google Inc. (Nasdaq:GOOG - news) and Yahoo Inc. (Nasdaq:YHOO - news), Microsoft plans to roll out a new advertising system called adCenter that sells ads across the company's Web content and services.In the future, advertisers will be able to place ads through adCenter across Microsoft's other platforms such as Xbox consoles and mobile devices.Massive's advertising partners include game publishers THQ Inc. (Nasdaq:THQI - news), Vivendi Universal's (VIV.PA) games unit, Take-Two Interactive Software Inc.'s (Nasdaq:TTWO - news) 2K Sports, NCsoft Corp. (036570.KS) and Konami Corp. (9766.T)Shares of Microsoft closed down 1 penny to $27.10 on the Nasdaq.
After updating his copy of SWAT 4 with the latest Vivendi patch, a gamer noticed that his game was connecting to Massive?s Ad server to grab posters to place in the game?s levels.As you can imagine the gamer was a little pissed to learn the game he had already paid $50 for was now serving him up a steaming plate of ads plugging Gamefly, Coca-Cola, Battlestar Galactica and Tripping the Rift every time a level ended. Instead of whinning about it, he did what any good gamer would do, he hacked it.What he discovered is that the ad client contacts the advertising server between games to tell it how long a gamer spent with each ad in their view. It also shows when the ads were seen, for how long, from how far away and from what viewing angle.Apparently Vivendi snuck a new End User License Agreement in with the patch, so the whole thing is legal, which doesn?t make it any less slimey.The gamer also discovered that while the ads aren?t yet appearing in the UK, that?s likely just because no one is paying for them to be placed yet.The good news is that there are two things you can do to prevent the ads: You can block the ads by simply adding a few lines of code to a couple of files. You can also stop buying Vivendi games until they stop taking advantage of us.
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