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Hollywood and the Gaming Industry

Agencies and advertisers will need to change course to stay in the game.

For the first time since their introduction, sales
of movie DVDs were less in 2009 than in the previous year. Hollywood’s
“Golden Days” of box office receipts also appear to be petering out. According
to The Hollywood Reporter, the film industry’s total market share
increased just barely from 10.99 billion in 2008 to 11.44 billion in 2009 – that’s
just 5 percent – and certainly not what Hollywood’s money people ever
envisioned.

So, what are people, male and female, young and old,
doing instead? Believe it or not, they’re video gaming – especially online. 2009
was a record year for gaming: hardware and software sales combined exceeded $16.5
billion, settling once and for all any dispute regarding the winner of the
Hollywood vs. Gaming Industry revenues debate. Just last summer, Microsoft
reported that Xbox live had hosted more than 650 million full online games of Call Of Duty 4. Staggering numbers . . .
and this medium is just getting started.

Research firm In-Stat predicted that from ’05-’10,
online subscribership will increase 40.8 percent for video game consoles and
94.2 percent for handhelds. Parks Associates feels those prediction are too
conservative. Their research predicts a rise in online revenues from $1.1
billion to $4.4 billion in the same time period. As of December 2009, global
subscribership from the U.S. to Japan, Norway to South Africa, and everywhere
in between has reached 9.5 million – with no signs of slowing down.

These consumer migration trends are not going
unnoticed by Madison Avenue and the top advertising firms. It’s their business
to track down and capture the elusive “consumer with purchasing power and
disposable cash,” wherever he or she may be hiding. Corporations like
Coca-Cola, McDonald’s and BMW are counting on them, much like the millions of
smaller consumer companies that need to reach these moving targets to survive. With revenues
that could be in the tens of billions of dollars, Madison Avenue (and Microsoft
and SONY) are drooling. And who can blame them?

So now that it’s all about big money (was it really
ever about anything else?), that relative “free ride” gamers have enjoyed
may be coming to an end. One can expect to have to sit through online
commercials, take surveys, interact with real-time chat and pay more just to
get to pull the trigger on an intergalactic alien trying to destroy the Earth
(just as an example!).

Two of the key players to watch in the new arena of
in-game advertising are IGN Entertainment, Inc. (a unit of Fox Interactive
Media Inc.) and Massive, Inc. However, Massive is a clear favorite when it
comes to advertising in video games. There is integrity in their purity of
focus, and so far their advertising in games like Splinter Cell: Chaos Theory has been tasteful and nonobtrusive. But
as more and more money is poured into gaming, and some of the most powerful
corporations in the world start sliding over from their Hollywood roots, there
are no rules of engagement, only dollars to be made.

What this means to gamers is yet unknown. There are
potential pros and cons. On the plus side, players can look forward to
increased development money being invested in the games and the overall
production values improving. On the downside, editorial content may be
distracted by inappropriate advertisements; the honesty of reviews may be
severely compromised due to financial concerns, and ultimately, the glitter of
Hollywood may fade into a low luster library of BluRays. Let’s face it,
Hollywood will never dry up and fade away – it will produce fewer films and the
crazy production money will slow down, but the real winners will be Hollywood’s
power and money transitioning over to the dark side! This isn’t a battle to be
won, but one to be embraced: There’s plenty of room for all to play and thrive
in the great expanses of the internet.

So with all this said, and the direction
irreversible, anyone up for a digital handprint on Grauman’s Online Chinese
Theatre?

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Chief Executive Officer

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