According to industry reports, mobile gaming revenue in Asia reached US$13.6 billion in 2014, representing 55 per cent of the world’s total market. Boosted by the sector’s fast growth in Southeast Asia, the region as a whole is expected to remain the sector’s biggest market for years to come.
However, game revenue and downloads only present part of the picture. YouTube’s figures indicate that of the billions of hours of video watched on its service each month worldwide, half of the top 100 channels are gaming-focused. In August, YouTube launched a dedicated site for watching live gameplay called YouTube Gaming. The move marked a significant move by the video giant into live-streaming territory that platforms such as Twitch have previously had all to themselves. YouTube’s entry signified the potential for gaming not only as a source of potential engagement for gamers but also spectators.
As such, the advertising opportunities are almost as limitless as modern gaming itself. Games are taking a variety of formats, from casual mobile games to console games through to more serious computer-based games.
On the serious end of the spectrum is eSports, otherwise known as competitive gaming, which draws in a fan base of over 134 million globally. SuperData Research values the industry’s current global revenue at US$612 million, much of which comes from advertising.
In Hong Kong, casual games are gaining traction. Arthur Chow, CEO of Hong Kong-based gaming company 6waves, says that mobile penetration has transformed the local industry, and “casual games”, which 6waves exclusively develops, have taken off in the past few years.
“The numbers show that players are very active,” says Chow. “People are willing to try all sorts of genres, from casual games developed in the West to hardcore games developed in China through to Japanese-style games.”
But depsite all the potential, advertising and marketing in games is still in its infancy. Opportunities to make advertising in games more “relevant and natural” are still an area that brands have yet to tap into.
According to Henry Stokes, vice-president of client development at Light Reaction, Asia-Pacific, mobile app gaming companies are aggressively pushing ahead marketing strategies that seek to not only drive the volume of installs but also boost revenue through in-app purchases from users. “Using DMP technologym, gaming publishers are segmenting existing install bases,” Stokes says. “They’re targeting users in real-time based on their previous commercial value, recency of use as well as in-app behaviour.”
RapidFire, a programmatic and media platform specialising in in-game advertising, streams ads in real time to online video-game environments through console, PC and mobile platforms.
Rather than have pop-up ads, the company’s technology allows ads to display inside the 3D gaming world on objects such as billboards, bus stops and posters — essentially any surface inside a game that correlates to places you might see ads in the real world. RapidFire’s clients in Asia include GroupM agencies in markets such as Singapore and Australia, and a company spokesperson said brands including Paramount Pictures, Unilever and Ford had used its advertising technology in APAC markets.
Last year, RapidFire partnered with Miniclip, an online game developer to bring dynamic in-game advertising (DIGA) to numerous 3D browser games.
“The most popular Miniclip games in APAC are Motocross Nitro and Diablo Valley Rally,” says Yulia Nesterchuk, RapidFire’s senior vice-president. “Within these games, we see the most impressions in our Ad Server in Indonesia, Hong Kong, Australia, Malaysia, and the Philippines. These markets combined generate around 3.5 million impressions in just Motocross Nitro and Diablo Valley Rally.”
However, gamers might have different ideas about in-game advertising.
“Just don’t do it,” says Hong Kong YouTube gamer Jason Chau, who has over 300,000 subscribers on his gaming channel. “If you want to promote a product or a game, use people to do it. Don’t ruin it for us [gamers] with in-game advertising.”
Chau says that his objection to advertising goes beyond pure aesthetics. “I’ve never clicked on an in-game ad except by accident,” he says. “You click through to an ad during game-play and that is very annoying.”
He suggests that the high level of user engagement in games is a double-edged sword, since distracting users from game play could do more harm than good, especially where brands are concerned.
“At the moment, gaming publishers — especially those with a ‘freemium model’ — are just using these ads to sustain the game,” says Jason. “But I don’t think it’s effective for third-party advertisers.”
BIG IDEAS For in-game advertising to work, brands need to be more natural
Arthur Chow, CEO, 6waves
The mobile gaming industry is still in its early stages and there are no fixed rules on how third-party advertising can work. One key principle is that in-game ads have to ensure a good user experience.
We have seen video ads that are relevant to the users work well before and interstitials with good designs can also be effective.
We once published a farming game and got an orange juice company to sponsor it. Users liked it and could associate themselves with the brand through this product placement.
There are opportunities for in-game advertising to be more relevant and natural. At the moment, the industry is dominated by disruptive ad formats. Product placement seems to be the most interesting form of in-game advertising and from what we’ve seen, it can be very engaging to users.
When it comes to brands using games as a vehicle for advertising and marketing, you often hear about gamification. The design and mechanics are very important. Advertisers need to ask what the objective of the campaign is and how a gamified-design can help achieve that. There is no sense in creating a game just for the sake of having a game.
Also, consumers are now very spoilt in the sense that they are all used to good quality games since most of them are free. Production quality of the games must be good or else the image of the brand may be tarnished.
In terms of designing a game to be ‘addictive’, it’s important that the user feels a sense of progress beyond the game just being fun and interesting.
Sometimes, it may be better for advertisers to work with game publishers in a co-production and marketing effort instead of trying to create a game on their own. Game publishers and brands can share their reach and audiences with mutually beneficial results.
Our view: Advertisers need to abandon disruptive in-game advertising formats or risk annoying gamers instead of engaging them.