Ethics and Law in New Media/Advertising in video games/History and involvement

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One of the early games that appeared on mainframe computers together with Hamurabi and Hunt the Wumpus in the late 1960s was Lunar Lander. It was a text-based simulation where a player piloted a spacecraft by typing in acceleration values. In 1973, Digital Equipment Corporation (the same company that put Spacewar! on its PDP-1 machine) commissioned a graphical version of Moonlander to demonstrate the capabilities of their new GT40 graphics terminal. One of the game versions included a hidden feature:

If you landed at exactly the right spot, a McDonalds appeared. The astronaut would come out, walk over to the McDonalds and order a Big Mac to go, walk back and take off again. If you crashed ON the McDonalds, it would print out “You clod! You've destroyed the only McDonald's on the Moon!” (1)

While this cameo was most likely a joke of an anonymous programmer and wasn’t sponsored by the fast food empire, the “only McDonald’s on the Moon” was probably the first instance of a brand integrated into the gameplay.(2)

In 1982, McDonald’s teamed up with Atari for a nationwide contest in which the restaurant gave away 12,000 video game consoles and home computers worth over $4 million. (3)

In 1983 Coca-Cola and Atari produced a game to be given away as a gift to the participants of Coke’s sales convention in Atlanta. Pepsi Invaders was a hacked version of Space Invaders. The "Invaders" were changed into letters that spell out PEPSI with one Invader left at the end of each row. The UFO was replaced with the blue and red Pepsi logo, and a three minute time limit was added at the end of which the screen flashes some wild colors and the game stops (Coke always wins). Another interesting feature of Pepsi Invaders was the fact that the player had infinite lives, which combined with the time limit made the game fairly pointless.(4)

In 1983, British CRL Group released Formula One for the ZX Spectrum home computer. Race tracks in game were surrounded by billboards for Marlboro (cigarettes), Dunlop (tires), Agip (gas stations) and Fiat (cars). A Goodyear blimp was hovering in the sky. The interface of the pit stop screen prominently featured Mobil’s and Goodyear’s names. (2)

In 1987 Ford Motor Company released The Ford Simulator, a firstperson driving simulator for DOS that came with detailed information on the company’s current line-up, a buyer’s guide and an order form. (2)

Since then, as the hardware further improved and graphic resolution allowed displaying finer images, the number of billboards grew and in many games house billboards were augmented with ads for imaginary products or humorous pop-culture references.

Sports games traditionally have been considered one of the most suitable genres for ingame advertising, in part because of their wide appeal and in part because they were

based on the real-world environments already saturated with brand messages.

In 2008 democratic presidential candidate Barack Obama joined a growing number of IT businesses using adverts in games to reach the youth market. The candidate placed in-game adverts in the Xbox 360 title Burnout Paradise featuring a billboard with Obama's image and a message that players should make sure they register to vote.(5)

Analyst firm Yankee Group reported recently that the worldwide in-game advertising industry is expected to be worth about $971m (£555m) by 2011.(5)

Google has recently launched its Adsense for games package, while Sony, Yahoo and EA have all said they will be carrying adverts in games as a way of driving extra revenue and making games cheaper or even free.

In-game advertising enjoys very high rates of return, much higher than print or direct mail marketing. Gamers are an increasingly important market segment for both hardware and e-commerce vendors.

As processors become faster than is necessary to meet most companies' needs, the gaming community is still spending huge amounts on the latest processors, something chip manufacturers and systems builders have been addressing for the past two years.

The amount of money they spend has also attracted technology firms, which are increasingly targeting the segment as one that can be reached directly and with little waste.

Sacramento-based law firm Kershaw, Cutter & Ratinoff (KCR) filed a class-action suit against Facebook developer Zynga (it is estimated that 10 to 20 percent of Facebook's $500 million annual revenues comes from games released by Zynga), seeking upwards of $5 million in damages due to allegedly misleading lead generation ads featured in the latter's games.

The Cost Per Action (CPA) advertisements in question allow users to earn virtual currency for social games like FarmVille and Mafia Wars by completing surveys, taking quizzes, or signing up for trial offers. Some ads are for legit companies like Netflix and Amazon, but others resulted in unauthorized credit, debit, or mobile charges to consumers for as much as $165. (6)



2. History of Advergames and In-Game Advertising Ilya Vedrashko / MIT CMS Unpublished / unedited thesis chapter draft August-September 2006