Was Pitfall Harry wearing Eddie Bauer khakis?

Does Leisure Suit Larry prefer Trojan-brand condoms?

Did my last game of Frogger end under the wheels of a Camry?

With rare exception, very few of the products, businesses, and services that appear within the realms of a video game come out of the real world. In the past, most video game publishers did not have the contacts, clout, or financial resources to approach major brands for logo usage, and would have been laughed out of most offices for asking for advertising dollars.

By leveraging some new technologies combined with the growth of Internet connectivity throughout the home, inGamePartners (IGP), a NYC-based startup is at the forefront of incredible change in the video game industry.

I had a chance to speak with Darren Herman, company founder and CEO, after the company announced several important new partnerships at last week’s Digital Life show in New York City.

In a nutshell, IGP brings together advertising and the gaming industry, specifically through product placements within video games. While this may sound horrible to some, including myself at first, Darren and IGP appear to have a very reasonable approach to the issue. The company approaches the situation from multiple perspectives, specifically including the gamers themselves.

The management team includes Andrew Sispoidis (who enjoys the unique title of CGO – Chief Gaming Officer), with over 10 years experience designing and building immensely popular and successful video games. According to Darren, the company is committed to making sure the product placements fit appropriately within a game. Mark Nathanson, the company’s Chief Marketing Officer, brings the other side of the business to the table, with a strong track record in the advertising industry.

IGP says part of their services includes helping both the advertisers and the game developers find the right placements. For example, I’d hate to see a big Nike logo in the tunic of a character in the new Lord of the Rings game, but placing the same logo on the athletic equipment of the players in Madden 2005 seems to make a lot of sense.

The company’s offering goes beyond just products placements. Where it gets really interesting is IGP’s game engine allows for changes within games, even after the game is installed. Using the Internet as a distribution mechanism, IGP can update existing ads and create new ones on the fly. With this type of a model, games that are surprise hits (as Grand Theft Auto was a little while back) can introduce new revenue streams long after their launch.

Furthermore, the engine allows for a degree of personalization by customizing the ads a user sees based on factors such as geographic location (as derived from the connection the user’s computer has to the Internet). Is this yet another invasion of privacy? Darren remained emphatic about consumer rights, and the company’s technology abstracts the individual user’s personal information from the advertising system.

For those of you who are still resistant to the idea, give a thought to how this type of technology can help the smaller publishers achieve greater success. IGP helps bring the gaming world to the overwhelming number of companies who spend millions on movie and TV advertising, but are not yet spending a penny in the gaming market. Does it help if I mention that, according to In-Stat MDR, in 2003 the video game console business generated more revenue than the box office?

We all know the video game industry suffers from wild fluctuations, with top studios disappearing after sometimes as few as a single failed title. There’s a reason top actors make over $20 million a picture, and it’s beyond box office gross. The movie industry has long been partially subsidized by advertising campaigns. I think people like Chris Roberts and Wil Wright deserve a few extra pennies, and if it means characters in The Sims actually drink Coke-brand soda, I don’t view it as a sell-out.

Darren describes IGP as a technology services company whose offerings are enhanced by the team’s hands-on consultative approach with their clients. The team works with the advertisers and game designers to create innovative product placements, specifically designed to increase brand awareness in a positive way, without detracting from the user’s gaming experience. Placements tend to be more interactive than your typical Web banner ad, and may even have a “mini-game” within an advertisement. Gamers prefer to get immersed within a game, especially with the increased quality of sights and sound the new PC and consoles both offer. Rather than have an advertisement spawn a Web browser or worse, exit the user from their game, a product placement may be as innocuous as a logo placement, or have a more useful result, such as emailing the user a link to click on once they are done with their session.

The company is not alone in providing a system to enable in-game advertising. Their competitor, Massive, also launched a service with dynamic capabilities. It appears that there is tremendous opportunity for both companies (and probably others, should the model work out) to do quite well, but something about IGP’s approach really caught my attention. When you’re ready to give it a shot, try playing CounterStrike on PHXX to see the IGP technology in action.

It’s encouraging to hear a CEO who is more than just passionate about the company he or she runs, but who cares about all the people who are impacted by the offering. Darren cares about the advertisers, and wants to bring them new vehicles and opportunities. He also cares about game designers, and is able to offer new revenue channels while not tarnishing their creative products. And finally, he cares about the gamers, and looks to find ways to bring non-intrusive product placements into their experiences. Darren even points out the other side benefit of bringing real brands into the gaming world, which does add an extra touch of reality into the brave new worlds the game designers create.

There’s no question that the gaming and advertising industries are both at interesting inflection points. The broadcast industry is undergoing significant change, causing advertisers to find new, more creative outlets for their content. At the same time, gaming is at an all-time high, and the next generation of Internet-enabled consoles all near launch. It would be all too easy to condemn a company whose goal is to place advertising within the gaming environment. However, with Darren and the team at inGamePartners, I suggest we open our minds to a company who want to do it the right way.

After all, wasn’t Ms. Pacman wearing a Gap brand scrunchy?

Useful links:
IGP Web site
http://www.ingamepartners.com/html/

Inside Gamer Online interviews IGP
http://www.insidegameronline.com/index.php?view=features&id=70&cpage=2

Clickz has some useful statistics on the video game industry
http://www.clickz.com/features/insight/article.php/3366051