The Law of In Game Advertising

(Original image from: In Game Advertising) (aliens and Big Macs, yum!)

In game advertising is shaping up to be big business. Product placement in television shows and movies has already firmly secured its place as a huge revenue generator to circumvent channel surfing or late comers to the movie theater. With the video game industry topping sales of $9 Billion per year and growing, the field is ripe for the product purveyors.

Enthusiasm aside, in game advertising is not all wine and roses. On the consumer side, there are concerns of privacy. The interactive nature of video games and the identity and data comittment of gamers to such services as XBox Live or World of Warcraft MMORPG-type games, raises the possibility of abusive advertising practices, data sharing and even identity theft. Also, traditional advertising law issues involving legal concerns such as antitrust, fair competition, communications and technology are raised. At the core of all advertising law (in game and out) is intellectual property law, particularly in the use of trademarks and copyrights.

A good place to start in shaping the doctrine of in game advertising is to look at the basics of advertising law. But the video game industry is unlike other advertising media. In traditional television advertising, the advertiser pays an exorbitant per second price to be broadcast during a program. For internet advertising the advertiser has more options, but faces the annoyance factor. Many web surfers click through ads or disable them when possible, and these attempts to reach the public are often looked at as a nuisance rather than a consumer net. The in-game ad, however, has the power to become a viable avenue that makes products memorable, functional and usable.


Many ads in games are often felt to be a natural extension of the landscape. The product placement that is done well is noticed, but not obtrusive. A good example is Tom Clancy's Splinter Cell, by Ubi Soft, that has Sony Ericson phones as an in-game advertiser. This spy game involves using many high-tech gadgets, and Sam Fisher (the main character) can always depend on his trusty communicator, emblazoned with the word Ericson across it. This ad works (see to the right) and feels much more natural than ads for McDonald's in an alien shooter game or Starbucks in a 1930's gangster game (see both above).

A company that wants to place an ad in a game pays a hefty fee ($2 million split btw Nokia, Chrysler and Motorolla to advertise in Tony Hawk's American Wasteland), but the life of the ad is not tied to programming spots and can persist for much longer than other ad campaigns. Game publishers like it, b/c such advertising can offset the cost of production by as much as 10%. Also, the consumer interacts with the advertiser's products or signage in a way that doesn't happen with TV or print. A player can be outfitted in a manufacturer's clothes such as Everlast in Fight Night Round 3. The possibilities are endless and the liabilities are real.

(Original image from: The Consumerist - Shoppers Bite Back)

Certain online games are susceptible to third parties placing ads in the game w/o the game publisher's knowledge or consent. Certain MMORPGs create online worlds that can be affected by the gamer, while other publishers chose to put the online game hosting responsibilities on the private users, rather than control it themselves. Publisher Valve of the popular online special ops shooter Counter Strike found that a third party, unrelated to Valve, brokered a deal to place Subway Sandwich ads in the game. This violated Valve's IP and created a host of legal issues that were likely unconsidered prior to this happening.

This is just one example of the types of legal issues that will emerge as the industry grows and the advertising becomes more rampant. In future posts I would like to develop the doctrine of in-game advertising and find a method for analyzing these issue.