Stolar makes 'sense' of the in-game ad market

With a career spanning 30 years in the video games industry, Bernard "Bernie" Stolar played significant roles throughout it. He worked for the original Atari's coin-operated games division and shaped the late ninties game console market. As president of Sony Computer Entertainment America, he was in charge of the company's PlayStation business in North America. Soon after that stint, he was hired by Sega of America where he managed its Saturn and Dreamcast platforms.

Stolar became an advisor to Adscape Media in late 2005. At the time, the agency was already an established player in the nascent business (and concept) of in-game advertising. When another in-game ad agency, Massive, got bought by Microsoft in May 2006, Stolar felt that Adscape Media needed its own deep-pocketed parent in order to effectively compete against its rival. So in March 2007, Stolar helped to convince Google to purchase Adscape Media. The search engine behemoth has positioned the firm as a division of its own advertising business, rebranding it as AdSense for Games.

Stolar spoke with GamesIndustry.biz about the nature of the in-game advertising market and AdSense for Game's (nîe Adscape Media) role in it.

Bernie Stolar: In regards to the AdSense program of Google, we're working with the same sales force, the same 800 people that sell advertising for all of Google's environments, whether that is newspaper, TV and so on. The advertising agencies are being educated in what in-game advertising is all about. That's going on right now, and we feel that's going on in a very successful manner.

You're talking about a very dynamic way of advertising, as opposed to just a static way of doing that. We can change advertising on a regional basis and a global basis, and that's pretty important.

If you look at research, there are more people playing games than watching television. So what does that tell you? That tells you there's a whole different audience. Remember, the game industry started in the '70s. Now games are from the cradle to the grave. It's no longer [about] your 15 year-old. It's no longer your 18-to-32 year-old. The median player of a PlayStation is 29 years-old. The demographics have changed. So the rules have changed.

I have a lot of fun in that environment, so thank you for asking that question. First off, the majority of developers are working with publishers. When I did my first game way back in 1980 - Shark Attack; it was a coin-operated game - that game cost me USD 25,000. The last game that I did at Sega cost USD 25 million. When PlayStation One started, the games were costing anywhere from USD 600,000 to a million. That's not the case [with] PlayStation 3 - you can't do a Triple-A game for under USD 20 million. This is not like the movie business, where if it fails at the theater, you've got cable, DVD, foreign rights to get back money.

So game publishers are very, very interested in this. We're talking with every major publisher, and there's a lot of excitement here. This will be a billion dollar industry by the year 2010. That's big.

Fighting games. I saw a game the other day in Tokyo. It was a fighting game, and as the fighters were going after each other, they were kicking Coca-Cola cans; they were showing billboards behind them. Adventure games, like Crash Bandicoot, have all sorts of objects that could show [advertising] through it. And it's casual games. The whole casual game category has opened up in a huge way for this. I would say 80 percent of games [will have] advertising in them by 2010.

It's basically the same, but let me give an example. Let's say you're playing Tiger Woods: I'm using the Nike [branded] driver in the game. I can pause the game, ping on the driver, [and] it takes me to the Nike site. I can buy the driver and also get an idea of what that club is about. At the same time, I can ping my friend on his mobile and say I hit the ball 300 yards and it shows the Nike [logo]. I just showed advertising on two different platforms. That's really different than any other way of communicating advertising.

One of the best advertising sales forces in the world, for starters. The ability to work with the producers that are doing the games -- don't forget that we are a technology company. So we understand sensitivity to the advertising. We're working with the [ad] agencies. We're working with the developers. We're working with the publishers to make sure that ads are placed in the appropriate places. A lot of companies cannot do that.

At the end of the day, we can't piss off the customer. We can't over-populate a game with ads. If you're going to do that, you better give the game away for free. You're going to see a lot of games that will have advertising on them, and some of those games will be given away for free. Those will be games that are being done online.

The industry is going online. The whole thing of putting boxes on shelves is changing. There are close to 10 million people on Xbox Live. As soon as Sony straightens out their [online gaming] act, they're going to get to the same place. As a matter of fact, they've already said that all the games they want to do are online games. Yes, we can put games on the shelf that have advertising, but those are going to wind up being static [ads]. The whole thing is going to come to dynamic.

Sensitivity to the consumer. Making sure that the consumer has fun. I've learned this - what made Sega successful, what made Sony successful initially, was the games. Right now, the thing that we're most sensitive about is making sure the quality of the advertising is there - that we don't piss off parents by putting inappropriate advertising in product. That will not happen. We've got a whole review system [to ensure] that doesn't happen.

I get very passionate about this. I've been a gamer all my life. I just turned 60 years old, and I'm still playing games.