Imagine this: You're engrossed in a heart-pounding car chase in your favorite open-world racing game. Adrenaline pumping, you weave through traffic, narrowly avoiding disaster as explosions rock the screen. Suddenly, the roar of your engine is drowned out by a booming announcer's voice bellowing about the latest energy drink. A flashy billboard for the brand materializes mid-air, blocking your view of the oncoming turn. You slam the brakes, lose the lead, and as soon as the ad disappears, you veer off track. Immersion lost. Game over.

The Rich History Of Console Gaming

From the birth of interactive entertainment with the Magnavox Odyssey to the revolutionary 3D worlds of the PS1, the genre-defining adventures of the PS2 (still the king with over 158 million units sold), and the hyper-realistic landscapes of today's consoles, each generation has rewritten the rules, capturing the hearts of loyal players and introducing new generations to AAA gaming. Despite the huge growth of gaming across other platforms, most notably within mobile, the console continues to retain its place in the gaming scene.

One of the reasons is that when you think about gaming or the term ‘gamer,’ many still picture someone sitting on their sofa with a console controller, and this is often true even if the term console is never mentioned and you’re speaking explicitly about mobile or PC gaming. This is because, for many of us, console gaming has been part of our lives in some way or another for a long time, and so have many of the brands synonymous with console gaming, like Sony, Microsoft, Nintendo, Sega, and Atari. All this means that console gaming continues to be seen as a premium medium, and so does its audience.

The Delicate Dance: Monetization vs. Player Experience

The draw for many console players is that the games are incredibly immersive, with stunning visuals, near-instantaneous loading times, and often complex, engaging gameplay. As a result, console players enjoy being fully immersed, which means disrupting play or clashing with the environment is a big no-no. This is one of the reasons why advertising has yet to really arrive on consoles, especially when you compare it to mobile.

Ads in mobile games have existed since the dawn of the App Store, and as a result, players are used to seeing them. They have become part and parcel of the experience, with many players happy to receive a free or discounted game partly funded by advertising, allowing the developers to continue supporting new updates and improvements to keep the experience fresh. Intrinsic in-game advertising has helped to improve the advertising experience further across mobile, offering immersive ads that complement play, make games even more realistic, and generate consistent and reliable revenue for developers.

Intrinsic in-game has also helped many PC developers monetize their games outside the mobile ecosystem, meaning they don’t pass the costs onto players. When asked about the impact of in-game ads, Danny Jugan, President of the game studio Axis Games, recently said, “It’s definitely a win all the way. The cost of developing games is going up as the bar gets raised. I think that's why we've seen such a push for free-to-play. Studios can't continue to survive when the development costs rise, but the price they're earning for the game stays consistent. This adds a great solution to that and allows for that revenue to continue to rise without being a huge burden on the user base. This has been the perfect solution for us. Our users love it. At the same time, it offers advertisers a way to reach a very specific group of people that are playing these games.”

It’s also interesting to note that younger generations tend to accept ads, understanding the value and need for them when it comes to advertising in games. According to Anzu’s research, 76% of gamers under 45 said they welcome brand advertising in principle, compared to 49% of those over 45. This outlines the stark contrast in thinking between the two age groups and demonstrates a change in thinking regarding advertising and its role in entertainment.

All of the above reasons contribute to why many expect the big console players to continue taking intrinsic in-game advertising seriously and why many console developers have begun looking to this monetization method to help them navigate the ever-changing and uncertain future they find themselves in.

Is There Demand From Advertisers?

Newzoo’s PC and Console Gaming Report demonstrates why console gamers are such an attractive audience for advertisers. With two-thirds of players spending money on video games and one in five considered big spenders, this audience is often shown to spend a significant amount of time playing games (40% spend 9+ hours per week playing) while having large disposable incomes.

In the past, advertisers have commissioned the creation of their own titles (Doritos Crash Course, McDonald’s Treasure Land Adventure, Sneak King by Burger King, and Pepsiman are a few that come to mind), sponsored in-game items like outfits, vehicles, and characters, and more recently have begun creating experiences and game modes in titles like Roblox and Fortnite. All this has been done to try and get in front of the elusive and premium console audience. However, there is a growing need for an easier and more cost-effective way to connect with this audience, and by monetizing with in-game ads, console developers can tap into this demand.

So we know the demand is there, we know console game developers need a way to help offset the enormous costs associated with game production, and we know players are increasingly accepting of ads as long as they complement the experience and make sense for the environment. We also know that the console ecosystem needs a new business model to continue thriving in a world where people can play on just about anything and have become accustomed to receiving premium gaming experiences for free, or for a price that does not reflect the production costs. It’s no wonder, then, that many are looking to in-game to help maintain the delicate balance between player experience and monetization.