Yankee Group Sizes the In-Game Advertising Market Opportunity; Exponential Market Growth to Reach More than $700 Million by 2010

Business Wire, April 17, 2006

BOSTON -- Yankee Group today revealed that the in-game advertising market is poised for explosive growth, garnering more than five times the current market value to reach $732 million by 2010. In a highly fragmented media environment, Yankee Group finds that video games present a promising window of opportunity as a growing advertising medium.

As television advertising loses its effectiveness, advertisers must reach a largely segmented audience with discerning tastes. According to the Yankee Group DecisionNote(SM), Video Games Are the Next Frontier for Advertisers, advertisers are finding greater value and return on investments from in-game advertising. In 2005, advertisers spent approximately $56 million placing ads in video games, up from $34 million in 2004. The market shows no signs of slowing. By year-end 2006, the number of games with in-game ads will more than double. Yankee Group anticipates approximately 200 games will contain in-game advertising, representing nearly all the major video game platforms.

As the market becomes more lucrative, it will have a significant impact on the business operations of video game publishers such as Activision, Ubisoft and Electronic Arts. Although console-based in-game ad serving is dominated by independent in-game ad-serving networks today, Yankee Group predicts that Microsoft, Sony and Electronic Arts will bring in-game ad serving in-house and come to dominate this segment of the market.

"Although the in-game advertising market is still relatively untapped, its promising business model will lead to swift market development," said Yankee Group senior analyst Michael Goodman. "Effectively competing in the interactive gaming market for the video game and advertising communities requires careful attention to the intricacies of the industry."

YANKEE GROUP (www.yankeegroup.com)

Yankee Group is the expert in navigating the global connectivity revolution. For more than 35 years, Yankee Group's strategic vision, research and analysis, quantified market intelligence and credible advice has been guiding innovation and empowering our clients to make critical business decisions. Yankee Group is headquartered in Boston with presence throughout North America, Europe, the Middle East, Africa, Latin America and Asia-Pacific.