Duo of companies receives investment money

In separate deals, myriad venture-capital firms invest in advertiser Oberon Media, IGA Worldwide.

Two companies in the business of pushing two tangentially related yet emerging forces in the game industry--casual gaming and in-game advertising--are counting millions of more dollars in their coffers thanks to investments. In-game-advertising company IGA Worldwide has received $17 million, while casual-games distributor Oberon Media did not announce its investment numbers.

Though often ignored at big-name gaming events like the Electronic Entertainment Expo, casual games are coming into their own, with some analysts expecting the sector to rake in $281 million in sales in 2006. Oberon will use its investment money to work toward "future growth and acquisitions," said the company, which distributes browser-based puzzle, card, trivia, and other so-called casual games to MSN Games, Playboy, Pogo, and other Web sites.

"Oberon Media's strong market position and strategic partnerships made it a very compelling investment for Morgan Stanley. We're pleased to be aligned with the leading company in this burgeoning market," said David Smoot, managing director at Morgan Stanley, one of three firms that invested an undisclosed amount of money in Oberon. The other firms are Goldman Sachs and Oak Investment Partners.

Many advertisers and publishers, faced with increasing costs to develop games, are turning toward in-game advertisements for extra cash. The ads are chiefly targeted toward the always-important but elusive demographic of 18- to 34-year-old men. Parks Associates analyst Michael Cai predicted last month at the Game Advertising Summit that in three years, finding a game without in-game advertising will be a difficult task.

IGA Worldwide negotiates with game publishers to insert advertisements and other product placements in the publishers' games. Test Drive Unlimited is a racing game set for a September 2006 release that will feature in-game-advertising technology developed by IGA. The racing game's billboard ads will be culled from an online database of images; as time passes, old ads can be replaced by new ads without requiring official updates from Test Drive's developer.

Intel Capital, Easton Capital, Morgenthaler Ventures, and DN Capital are the four firms that invested about $17 million in the in-game-advertising company. "The explosive growth of digital gaming is attracting millions of new users," explained Intel Capital's Damien Callaghan, "and is a key element of Intel's vision for the Digital Home."

IGA said it will use its newfound funds to build relationships with publishers and extend its operations in North America, Asia, and Europe.

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Discussion

17 comments
Xidus
Xidus

im going to hack into the advertising companies and change their ads lol put some revolutionary stuff up in games.

_Sam_
_Sam_

Well I find money related things interesting ;)

gamer_10001
gamer_10001

In game advertising is okay if it keeps prices down and doesn't interfere with gameplay in any way.

Blazer88
Blazer88

Only morons believe that fast food restaraunts make you fat.It is a choice and nobody forces you to eat there.

DeathStar17
DeathStar17

""if companies pay to advertise mayb games will be cheaper....i don't mind seeing a few mcdonald's signs if it knocks a few bucks off the game price "" "Having McDonald's adverts in games would make even more people in this country obease" No it wouldn't...and its not McDonalds fault....the people choose to eat the food.

mikeystar
mikeystar

"if companies pay to advertise mayb games will be cheaper....i don't mind seeing a few mcdonald's signs if it knocks a few bucks off the game price " Having McDonald's adverts in games would make even more people in this country obease

sundown70
sundown70

if companies pay to advertise mayb games will be cheaper....i don't mind seeing a few mcdonald's signs if it knocks a few bucks off the game price

paradyme777
paradyme777

In-game advertising...not a big deal to me...whats so wrong with it? When you actually find the stuff it's usually sorta funny.

tarred
tarred

Bleh! This stuff needs to end before it starts. I really hope that players aren't going to spend money on games with advertisements. Would you buy a DVD with advertisements? No? Then don't buy games with them! Put your foot down before this gets out of control!

SNKrock
SNKrock

will we please get a price break on games for this?? seriously, i'm STILL spoiled by when PS1 games were goin for 39.99 for regular games, 49.99 for the premium stuff...

Benny_is_here
Benny_is_here

Actually, this is great! Advertising is what makes stuff free. Without it, GS wouldn't be making money off free subscriptions. All we have to do is look at banners or some ads that are rarely in the way, and we get free/cheaper stuff. In-Game advertising is also way better than regular ads, because you can just ignore it more easily. I mean, who was actually distracted by the EA billboards on Burnout 3?

NeDi2004
NeDi2004

test drive will be good.... i hope.

Freaken_Feline
Freaken_Feline

Hey test Drive cool....wait advertising thats not good