Double Fusion responds to Stringer, Kotick comments

Double Fusion CEO Jonathan Epstein has told GamesIndustry.biz that he broadly agrees with most of the comments made by Sony chief Sir Howard Stringer and Activision Blizzard boss Robert Kotick about in-game advertising at the World Economic Forum in Davos last week.

The pair, when discussing the subject, told the Financial Times that they were sceptical about the impact that in-game advertising was having.

"The [supposed] solution to everything at the moment in the digital space is ad-supported," said Stringer. "While advertisers are happy to talk that up, there is a limit to the amount of money available," while Kotick added: "It's early days. I wouldn't go in that direction myself."

Now, talking exclusively to GamesIndustry.biz Epstein, whose company specialises in in-game advertising, has added his views to the debate.

"First of all I actually agree with a lot of what Howard and Bobby said. What it points to for us is that there's a broad spectrum of opportunity for advertising in all sorts of games," he said.

"Some games may not really lend themselves to advertising at all, whether that's on business model or content, whereas others do. We do believe that we will find a model to have a fully ad-supported, or ad-and-item-supported gaming business, and we certainly see signs of that emerging.

"But I also believe that in high-priced console games, with the notable exception of sports and racing games, that ad placements that are ultimately interesting to advertisers will be hard to achieve and have users accept.

"In-game advertising is never going to underwrite the Sony platform, and I don't think anybody ever said it would. But I think there will be different sorts of games that will be able to recoup some of their development budgets."

He pointed out that while the number of advertisers spending money in the game space last year doubled over the previous year, he expected it to triple this year, and that for the top titles developers could look at a significant percentage of costs to be offset by ad revenues in the future.

"In terms of the development cost I think it could be anywhere from 10-20 per cent, although obviously budgets vary and we're talking triple A - it could 100 per cent for advanced online titles that may cost one sixth as much to make."

But when asked whether he thought that an increase in ad revenues would affect the retail price of games he refused to be drawn.

"In terms of possible price reductions as a result of in-game ads, that's really a question for the publishers. I think gamers want value - they ask 'What's in it for me?'

"Many of the programs we're working on are about bringing new levels and sponsored downloadable content or tournament opportunities, and other forms of value - more stuff, in addition to what they bought in the box.

"Over time I think advertising revenues will be a much bigger factor for publishers to consider in that question."

Double Fusion earlier signed an agreement to serve ads to US casual games company Spill Group, a move which Epstein told GamesIndustry.biz was a very positive move.

"It is one of our more significant deals in terms of our move into the casual space - it will greatly accelerate our reach. We've had other significant deals with the likes of 2K Games, THQ, NCSoft and others, and I'd certainly put this up there as one of our top and most important partnerships."

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