MMO developer NCsoft today announced a new partnership with Double Fusion to supply in-game advertising for City of Heroes, releasing several images of the game world before and after ad integration.

The companies say that the real world ads will lend a sense of realism to the super-powered world of City of Heroes, with players able to opt out of the advertising if they so choose. Additionally, NCsoft plans to make use of the technology to display player-created content within the game.

"We are pleased to work with Double Fusion on City of Heroes," said NCsoft general manager Brian Clayton. "[T]hey have demonstrated sensitivity to the needs of our community and fundamentally understand how advertising can bring value to the players when executed gracefully, and in the appropriate context."

NCsoft acquired complete ownership of City of Heroes last year from original developer Cryptic Studios.

Double Fusion recently signed a similar deal with developer Gearbox Software, which plans to use Double Fusion's technology to bring in-game advertising to an undisclosed roster of upcoming titles.

A couple of days ago it was announced that Gearbox Software directly made a deal with Double Fusion to handle the in game advertising for their upcoming game releases. Randy Pitchford of Gearbox Software has put out quite an update on the situation. "We respect any contempt for exploitive advertising that negatively effects the integrity or the quality of the game because we, as hardcore gamers, share that same contempt." Pitchford opens with.

At this time Gearbox has not actually made any specific commitments for any of their announced titles to advertisers. "We partnered with Double Fusion because we believe they approach this kind of thing with the right attitude and because we wanted to be in control of these kinds of decisions for some of our games." Pitchford explains.

It is also interesting to note that Double Fusion mostly has made deals with the publishers of games and not the developers. Gearbox Software is going about this differently as they Pitchford says to have more direct control over how potential brands are placed in their games. Below is an example of context sensitive placement as described by Pitchford.

Gearbox Software today announced a partnership with advertising company Double Fusion to bring in-game advertising to future Gearbox titles.

Under the terms of the deal, Double Fusion is to provide Gearbox with dynamic advertising technology to support the delivery of in-game ads and integrated sponsorships in upcoming Gearbox games. The companies stated that they will "work together to ensure that all advertising programs are appropriate and add value to the gamers' experience."

As of this time, Gearbox has not disclosed which of its upcoming titles—such as Aliens: Colonial Marines (PC, PS3, X360) and Borderlands (PC, PS3, X360)—will incorporate the ads.

Several companies are expanding within the lucrative sphere of in-game advertising. EA and Microsoft recently extended a deal in which Microsoft's in-game ad arm Massive, Inc. would provide streaming advertisements for upcoming EA Sports titles on the Xbox 360.

Microsoft subsidiary Massive Inc extended a previously-inked deal to provide in-game advertising for Electronic Arts titles, the company announced today.

The two-year extension of the deal will expand the roster of titles set to feature in-game advertising for products in various EA titles. Massive's advertising technology allows for dynamic updates of in-game advertising by streaming ads from a server whenever a game is played.

"EA strongly believes that dynamic in-game advertising is an important growth area for our business," said EA Casual president Kathy Vrabeck. "We selected Massive because they are the industry leader in this space with a global sales footprint, solid brand recognition and in-depth experience in video game advertising."

Massive currently provides in-game advertisements for the PC and Xbox 360 versions of several titles in EA's Need for Speed series. As part of the extension, the company plans to add a number of EA Sports franchises to its in-game ad service including Madden NFL, NBA Live, NHL and NASCAR.

Update: Blizzard has clarified that, as expected, only the Battle.net component of StarCraft II will contain advertising.

"We have no plans to have in-game advertising in StarCraft II," the company told Blizzplanet. "We believe Bobby was actually referring to Battle.net, which has always included ads."

Original Story: With the merger between publisher Activision and Blizzard parent Vivendi Games closing in, Activision CEO Robert Kotick has briefly mentioned his company's plans for maximizing profit from Blizzard's upcoming PC strategy sequel StarCraft II.

"On the Blizzard side, [we need to] really be figuring out things like the StarCraft business model for the future, with in-game advertising and sponsorship, [which have] really not been something that has moved the dial for anybody in the... Read more

Despite being a free-to-play ad-supported web title, EA DICE's upcoming cartoony shooter Battlefield Heroes (PC) will not feature any type of in-game advertising or product placement, senior producer Ben Cousins revealed during a presentation attended by Shacknews.

Rather, the advertising revenue will come from the title's official web site, which players must visit to launch the game. A bright yellow "Play Now!" button will be prominently featured on the page, along with news posts, details on purchasable items, and, of course, banner ads.

Similar ads are affixed to game's loading screens and registration page, guaranteeing a number of ad views whenever players launch the game. Cousins also touched on project's low system requirements, which mandate that players have a 1GHz processor and an integrated graphics chip in their system.

However, the producer remained mostly silent about the title's oft-mentioned micro-transactions, refusing to specify whether purchasable items will be restricted to fashion accessories or if they will include game-altering weapons and abilities.

Sporting a number of casual-oriented tweaks and modifications, Battlefield Heroes is slated to arrive this summer. For more information, check out today's bonanza of details.

Massive Inc, the same Microsoft advertising subsidiary now in charge of delivering ads to EA Sports titles, yesterday released the results of a Nielsen Company study that shows 64% of gamers are susceptible to in-game advertising.

The study claims that players of EA Black Box's Need for Speed: Carbon showed an increase in their purchase consideration of products advertised via in-game billboards by 41 percent over an ad-less control group. Brand familiarity rose 64% in the group of ad-viewers, while the average ad rating--described as those players who liked the advertisement--increased by 69%.

As in-game advertising ramps up, Nielsen has been rapidly... Read more

As gamers know, product placement and advertising in popular media and games isn't a really new idea--it started to garner some attention as far back as 2001, with large companies sponsoring mini-games and Quake levels promoting phones. Still, despite some fuss about the idea, it had yet to catch on in a truly significant way. Gamers were still desperate for marketers to push products on them, but it seemed that it was not quite ready to materialize. How would they know what to buy?

After the dotcom blowout, some people picked the idea back up and started to actually form companies dedicated to the concept--in-game ad firms Massive Incorporated and IGA Worldwide sprung up in 2002 and 2004, respectively, and major market research group Nielsen... Read more

A United States patent filed by Google and published this March has revealed details of extensive in-game advertising strategies that are apparently under consideration by the company.

The patent summary reads, "Information about a person's interests and gaming behavior may be determined by monitoring their online gaming activities (and perhaps making inferences from such activities). Such information may be used to improve ad targeting." It then goes on to describe fairly specific scenarios where in-game ads might be used to not only generate ... Read more

Gamasutra's latest Question of the Week deals with the growing trends of in-game advertising. As usual, the site receives comments from varied industry professionals as well as general readers. As one might expect, the general sentiment is that it is inevitable that in-game ads will become more prevalent as time goes on. One response points out, "Any time money can be extracted from a form of media, it will be." A few responses point out that in-game ads will help secure elusive funding, some condemn the presence of advertising in games altogether, but in general the concensus seems to be that considering such ads are surely only going to become more common, the most important thing is ensuring that each advertising model fits the game in which it is being used.

Microsoft's Daniel Drew notes the rapidly rising costs associated with game development, surmising that many publishers may not want or be able to fund certain projects without alternative revenue schemes. "I think it will be especially important for independent developers - just as it is for websites - where selling advertising space may well be their ONLY source of funding," he states. On the other end of the spectrum, Paul Garceau of New Dawn Productions says, "Advertising should be kept outside of the video game and off the game machines. Video games are expressly rooted in entertainment, and marketing is not part of what a video game ought to be. I do not want my hard earned cash wasted on a marketing campaign that I have absolutely no desire to be exposed to." Entelepon's Ryan Bailey warns against developers becoming "very susceptible to changes that are requested by advertisers, or that encourage advertising, as has happened with TV and newspapers." In that vein, Creat Studio's Dimage Sapelkin points out that realistic settings are much more conducive to ads than other settings, and wonders if that may indirectly influence where games take place.

One anonymous response is more optomistic, focusing on various potential positive aspects of in-game ads:

Yes, it provides additional funding - defraying marketing expenses, maximizing publisher profit, and creating additional incentive for development of new games. Every game is unique and needs to be treated uniquely, so marketers that create customized ads for individual games that enhance a game's alternate reality will actually make games better. Taking an ad formula and applying it across categories and brands is not a good idea.

One frequently cited benefit of ads is that it may drive game prices down as development costs are alleviated. I'm not so sure about that, though. At this point we've already made the next-gen leap to $60 for a standard console game (I assume Sony and Nintendo will follow suit for major third-party releases, as price points tend to be pretty standard across the industry), and it's hard to imagine publishers actually going back on that.

We werent just blowing smoke up your bootie when we talked about in-game advertising gathering up some momentum lately. Just a couple of days ago Massive Incorporated launched with partnerships with VU, Ubisoft, and Legacy Interactive. Here's the PR from Massive:

... allows advertisers to simultaneously reach an aggregated audience of gamers through real-time delivery of advertising across an entire network of top-selling video games, enabling brand marketers to tap into the nation's largest entertainment industry using a familiar model that is similar to purchasing television advertising. The Massive Network delivers ads seamlessly into the gaming environment with no impact on game play or performance, making in-game advertising painless and unobtrusive for gamers, publishers, and advertisers alike. [snip]

In-game advertising has come up a few times here over the years as something we all expect to become popular sooner or later. It never really seemed to materialize into anything really big. Perhaps things are about to change though... Nielson Entertainment Media (The company famous for their TV ratings system) announced a little while ago that they are partnering with Activision.

Michael Dowling, general manager at Nielsen, said the technology is far more advanced than the People Meter, the device used by Nielsen Media Research to monitor the nation’s television viewing habits. The technology may involve a non-audible code inserted into the game that would be picked up by a Nielsen device. Nielsen is currently in negotiation with several game studios to insert the code in their next generation of titles. According to Dowling, Nielsen’s efforts will track not just impressions, but game play itself.

The article goes on to give a couple other examples of developing in-game advertising technology.