Report: In-game-ads omnipresent by 2008

It's no secret that next-generation consoles will allow for games with far superior graphics and much more complex gameplay and stories. It's also no secret that it will take a lot more manpower to program and write said games--meaning a lot bigger development costs for publishers.

Gamers have already seen one way publishers are defraying the high price of next-gen development. In fact, they see it every time they shell out $59.99 for an Xbox 360 game. Now, a financial analyst is predicting that over the next three years, publishers will start relying more and more on another revenue-driver--in-game advertising.

"Due to the soaring costs of developing video games, the tremendous reach of video games ... and integration with online commerce, advergaming will be a common fixture in video games," said David Wanetick, managing director of The Wall Street Transcript. "Advergaming is clearly on a rapid growth trajectory, as it is projected to generate $4 billion in revenues by the end of 2008."

A periodical targeted at investors, the Transcript not-so-coincidentally is hosting a conference called "Profiting in the Video Game Economy" in New York City on February 16. According to a conveniently timed statement from the publication, the conference will cover topics such as "Considerations for Investing in the Video Game Economy," "The Impact of Hollywood on Video Games," "Wireless Gaming and Multimedia; Casual Games," "The Convergence of Video Games and Comic Books," and "Legal Issues Impacting Video Games."

There is evidence that Wanetick's lofty predictions about "advergaming" are coming true. Many games, such as SWAT 4, already sport dynamic in-game advertising, dubbed the Worst New Trend of 2005. A semirecent study by media-research firm Nielsen Interactive Entertainment found that in-game ads do indeed work, prompting growing interest in the practice. Earlier this month, the latest game-centric advertising agency, Engage, hung up its shingle alongside competitors Massive Incorporated and In-Game Advertising Partners.