Anyone who likes video games and investing (including an awful lot of Fools) will probably be interested in the news today out of THQ (NASDAQ:THQI). The firm has signed a deal -- the details of which were not disclosed -- with an in-game advertising company called Massive Network.
Simply put, Massive serves as a broker to place advertisements into online games. These ads can change in response to the times, unlike static images that could be incorporated under, say, a direct deal between the game maker and an advertiser.
That not only means opportunities for ad dollars, it means more realistic games. Running down the virtual street after the punk who stole your wallet? You might go by a billboard depicting the latest movie from Time Warner (NYSE:TWX), and that movie sign can rotate from week to week, just like the billboards on your daily drive. Sneaking into a high school to rescue hostages? Your black pajama-clad online alter ego might slink past beverage machines hawking the latest flavor-enhanced concoction from Coca-Cola (NYSE:KO).
From an investor's standpoint, this makes a lot of sense. If Massive can deliver what it promises (a buck or two in extra revenue per game), shareholders should see the benefits later on the bottom line. Of course, a delicate balancing act is required. You probably don't want your undead priest to have to ride his epic mount past a Nokia (NYSE:NOK) kiosk in the Undercity of Vivendi Universal's (NYSE:V) World of Warcraft.
On the other hand, you might be quite happy to hop in a Honda (NYSE:HMC) Element in your pursuit of the aforementioned street punks. (By the way, I'm not just pulling names out of thin air, here. Nokia, Vivendi, and Honda have already been payers and players in the Massive Network.)
Other Massive advertisers include Verizon (NYSE:VZ), the U.S. Navy, and the national Highway Traffic Safety Administration. (Please tell me those ads are in street-racing games.) The firm's game relationships include other major names such as Sony (NYSE:SNE), Ubisoft, and Atari, as well as many smaller outfits.
With video games taking up an increasing portion of our entertainment budget, measured by both money and time, it's only natural to see the advertising world catch up. As my visionary colleague Rick Munarriz pointed out in an interesting piece about Google, online advertising is preferable in many ways to traditional ads, because it's targeted, easily measured, and capable of changing quickly.
Investors in the space will do well to consider the potential for additional revenues to companies like THQ. They may also want to keep their eyes open for an opportunity to get a piece of Massive, a still-private company that competes in this new space against other new entries. If Massive can roll its platform into the default engine for in-game advertising, we could be looking at an amazing baby Rule Breaker. Keep your eyes peeled, gamers. This match is just beginning.
For related Foolishness:
- Google at $450? It seemed far-fetched a few months back.
- See a big ape bash a gaming powerhouse.
- Mobile gaming is hot, too. Just ask Jamdat shareholders.
Seth Jayson is a recovering Warcrack addict. At the time of publication, he had no positions in any company mentioned. View his stock holdings and Fool profile here. Coca-Cola is a Motley Fool Inside Value recommendation. Time Warner is a Motley Fool Stock Advisor recommendation. Fool rules are here.
