(* Source: Ran Cohen & Chris Houtzer *)

Two industry insiders weigh in on the evolving business of casual gaming

It has been a banner year for the $1 billion dollar casual games industry, and 2007 is looking even better. A record number of people are playing games such as Cake Mania, Bejeweled, and Super Collapse 3. Tens of millions of casual games are either downloaded or played in a Web browser every day. All this growth is tremendous; however a very small percentage (less than 2 percent) of people downloading casual games actually purchase them. This frames the enormous opportunity for in-game advertising.

Throughout 2005 and 2006 in-game advertising in console and online PC games has been a very hot item.  The evolution of in-game advertising capabilities has allowed advertisers to see it as a viable alternative to traditional ad channels such as television and outdoor display ads.  As the reach of television advertising decreases, forecasts for in-game advertising are increasing, with research firms such as the Yankee Group estimating in-game ad revenues to reach $732 million by 2010.  These numbers demonstrate agencies’ strong interest in this budding channel, with many releasing trial campaigns featuring a dedicated in-game advertising line in their budgets.

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