Google, they say, is everywhere. Maps, e-mail, calendars, video. But one lucrative market the search and advertising giant has so far failed to enter is video games.
How lucrative? The entire games market, including console gaming, PC and online, was worth about $7 billion in 2005, according to the Entertainment Software Association. What's more, some analysts predict that market to experience almost 12 percent compound growth and grow to $46.5 billion by 2010. Wireless games for cell phones are expected to grow the fastest, expanding from a $646 million market last year to $2.3 billion by 2010.
Of course those are product sales, not advertising dollars. But can Google afford to ignore a market that big? Microsoft is way ahead of Google in this area. Microsoft subsidiary Massive already sells ads into games. That advertising is hardly a venue for bleeding-edge companies, either: Toyota recently signed up to display interactive advertising on Massive's platform, and prestigious brands such as Coca-Cola, Verizon and Universal Music are in the game too (so to speak). Just today, Microsoft announced it'd soon release a set of game development tools to allow users to create games for the Xbox console and online.
While Google may never get into creating console or computer games, it's doubtful it'll ignore the video game advertising market for too long. After all, studies by Nielsen Interactive Entertainment have shown that gamers remember advertisements in games about 35 percent of the time. Google could make a big splash by souping up ads to be interactive and reselling in-game ad space to multiple SMB advertisers who want to advertise locally. The biggest obstacle now is likely partnerships with the content producers--it's unlikely that Microsoft will let Google sell advert space for Xbox online. But maybe one day soon we'll have the dubious benefit of seeing text ads inside Super Mario Kart.