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The cost of producing video games is rising fast, and developers are turning to the concept of targeted, fluid video game ads that could add badly needed revenue. Startups are beginning to support the demand. However, the estimated advertising revenue from video game advertising is still only a small percentage of revenue garnered for ads across all forms of media, including $66 billion from TV ads. Some analysts say the future of ad video game revenues could be weak because there are too few online gamers. However, game publishers, including Activision and EA, are still using research to find out what effects the ads have, and some companies, including Massive, are launching technology services. The industry needs blockbusters to cover the majority of titles, and it is possible that if the number of online gamers increases, dynamic ads could save the day financially. Such information as time spent viewing an ad, region of the country in which a gamer plays, and whether or not the player has seen the ad before can all be used to modify an ad to improve connect with the individual player. Companies can also improve their own sales efforts through the use of follow-on research on the success of an ad. DoubleFusion and Massive are both working with Nielsen Entertainment to find out how ads are working. Fluid advertising could improve sales for advertisers and also change the video game ad industry by adding the flexibility of payment by advertisers for a specific time segment. Players will have to go along with the strategy, however. Related issues include the possibilities of privacy issues and a cluttered gaming environment.
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