The untapped advertising potential in video games

The Super Mario Bros. Movie, based on the popular Nintendo video game franchise, opened to big numbers at the box office over the weekend. It comes after HBO’s The Last of Us, based on another hit video game series for PlayStation, became one of the network’s biggest shows of all time earlier this year.

It would appear that Hollywood has finally figured out how to capitalize on video game fandom, after years of critical and commercial failures. 

Marketers want a piece of the action, too, and are encouraged by the scale of the opportunity. A new report by Comscore suggests that gamers are open to — and some state they’re wanting — certain advertising experiences. But while the majority of gamers play on multiple platforms, some of those platforms are riper for advertising opportunities than others. The bulk of the action is in mobile gaming, and the report suggests that marketers need to level up their efforts to reach those gamers who are most receptive to ads.

Gamers welcome in-game advertising

According to Comscore, 74 percent of gamers — which it defined as anyone who plays on a gaming device multiple times a week or played at least once in the past month, minus those who only play mobile games — wouldn’t mind ads if there was a chance to be rewarded. Fifty-five percent actually wanted more chances to see rewarded ads in a given day. 

Rewarded ads — which give players the option to see an ad in order to be granted a “reward,” like a bonus resource that you would otherwise have to pay money for — are primarily in mobile “freemium games,” according to Liam Deane, a principal analyst who specializes in the games market at tech research and consulting firm Omdia.

Ian Essling, Comscore’s senior director of survey insights, cautioned that while it’s possible for these types of ads to show up more on big console and PC games in the future, they have an uphill battle with players.

“Gamers are more receptive to those ads in freemium games than if they already paid $60 for a console game,” he said.

In fact, mobile gamers were least likely to be bothered by advertisements, according to Comscore. Twenty-three percent of mobile gamers said advertisements negatively impacted their experience, compared to 31 percent of console gamers and 35 percent of PC gamers.

Another kind of advertising in video games that is gaining traction, particularly with sports and racing games, is intrinsic in-game advertising, which is when ads are baked into a game’s world (as a billboard, for example).

This kind of advertising is small right now — accounting for less than $1 billion of gaming ad revenue — but Omdia estimates that it will grow to nearly $10 billion by 2027.

Most gamers may not mind: 55 percent said product placement in games “makes the experience more real,” according to Comscore’s survey.

“Gamers appreciate real brands in games when it makes sense,” Essling said. “Players are responsive to it, so there are plenty of opportunities for growth for games and ad placements that make sense.”

One obstacle Essling noted, though, is that brands may not want to be associated with certain violent or crude games.

Both types of in-game advertising could come with challenges if they were to expand, according to the experts The Current spoke with, but data shows that gamers could be receptive to the ads. The biggest challenges would be on console and PC games, while conversely, there is even more opportunity to place ads in mobile games, as those players could be more open to them.

Market dynamics are ripe for new advertiser opportunities in gaming

These insights come at a time when global in-game advertising revenue reached $67 billion in 2022 — with most of it coming from mobile games and nearly a third ($21 billion) from the U.S., according to Omdia. Revenue has tripled since 2018, and Omdia expects it to nearly equal linear TV ad revenue by 2027.

From an audience perspective, 76 percent of gamers play on multiple platforms, including mobile, consoles, and PCs, according to Comscore. Eighty-four percent of those surveyed had played freemium games (free-to-download games that offer in-game transactions) before. And there was a 7 percent increase in unique visitors to gaming sites or mobile apps in December 2022 compared to December 2019.

As the scale of the opportunity continues to swell, Comscore’s 2023 State of Gaming indicates that marketers may need to be more open to experimenting with new strategies, like rewarded advertising and intrinsic advertising, to reach the gamers who would be most engaged with the ads.