While in-game ads and ad sponsored titles are in vogue these days, there's still a large market for so-called advergames. Essentially games built around a brand that pay for themselves, these sorts of games are becoming increasingly common. Many company websites, viral or otherwise, feature some sort of advergame and Burger King recently took the concept to the next level by launching a successful campaign with three advergame-type titles of their own for Xbox/Xbox 360.
But did you know that the basic model of the advergame was pioneered in 1995 by a company called Skyworks? While the Internet was still a very new thing to most people, some former Activision employees looked to see how they could make a business out of games on the web. The business experiments of some well known game designers ended up paving the way for many to follow.
We sat down with Garry Kitchen, the President, CEO and Co-founder of Skyworks, and talked about the past, present and future of advergames.
Write my name in the sky
Before detailing the history of Skyworks, it's relevant to detail the history of its founders. Originally at Atari, David Crane helped found Activision and worked in various roles as a designer and programmer on titles like Pitfall! and Ghostbusters. He teamed up with Kitchen (who created Gamemaker for Commodore 64) to form Absolute Entertainment where they worked on A Boy and His Blob and the Battletank series before they decided to try the new Skyworks venture.
"Skyworks was founded in 1995 by myself and David Crane," detailed Kitchen. "He's based in Northern California and is the CTO. He was a pioneer, worked with Atari and was one of four founders of Activision and I met him there in 1982.
"We worked on various platforms, everything from Sega and Nintendo, until 1995 when we became interested in the Internet. At the time, it was still a very new thing to most people, so we founded [Skyworks] because we didn't see many other game designers focusing on online. With Bill Wentworth, our Executive Vice-President of Creative Development, we looked for methods to create a game in the web browser. Then after that, we tried to figure out a way that we could make money doing this. So we created this business model so that the games would be supported by the advertising model of ads in the game. Our first game project was with LifeSavers of Nabisco. It seemed like a good fit, because candy is associated with fun, so we created CandyStand.com for them, a fun little casual game site. That changed hands a few times, from Kraft and then eventually to Wrigley. The site gets millions of unique users every month, so it's a tremendous asset for them. It was the first major evidence of a major brand using games online in such a way. So we started lining up different brands and we have a strong list of brands we work with today, like AOL, Ford, Nabisco, ESPN, Pepsi and so on."
"We also own Advergame.com and it's a business-to-business site to explain what an advergame is and what we can do with it... show various statistics to demonstrate what can be done," he added. "Traffic to the site is driven by our games being online or we buy search engine keywords and drive people there. Actually, the reason we launched R-cade, which is actually a games site, is because we were having 400,000 people a month coming to Advergame.com looking for games!"
Making a successful advergame is its own tricky task compared to other types of games. Like any other type of game, it still has to be fun and make the player feel glad he played it. At the same time, the game is beholden to the client that paid to have the game created so they can benefit from positive product association or good old fashioned branding. It's similar to what is described in the usual publisher/developer relationship but is discreetly different because of the particular challenges of advertising.
When asked what he thought makes a successful advergame, Kitchen responded, "It's a question people ask all the time.
It's a fine line, because the company doing the game has to understand branding and be able to sit down with a company like Pepsi and talk their language, but they also have to build a state of the art game. Then, in building the game, they have to keep the game within the stated goals: If it's fun but the users don't have the 'brand experience' then the client has wasted their money. On the other hand, if you listen too much to a brand management about the message, savvy gamers will take one look and pass. So fundamentally it's all about the integrity of the game experience."
That begs the question: How do you approach making an advergame? Does the client propose a game idea or does the client simply give Skyworks a product or brand and they create the idea? "It really varies by client," answered Kitchen. "For example, they might say, 'We're running this TV campaign and we want a game to mirror like that.' We actually have a project right now for an insurance company that's being worked on that way. Other times it'll be, 'Here's our brand, here's our message. Run with it.' So we do it both ways."
Consult the Zodiac for the future
With the expanded penetration of broadband in America, the possibilities for advergaming seem to be expanding. Skyworks recently signed a deal with Zodiac Interactive to expand their influence onto yet another medium, that of the set-top cable box. With millions of potential casual gamers in living rooms across the nation, it seems like a business venture that has the possibility of paying off big time.
"Both companies found that there was potential to enable services for our clients that the other company had. We want to get our products in front of as many eyeballs as possible and cable set-top boxes are in thousands of homes, so there's great potential there," said Kitchen. "Zodiac had noticed advergaming a while ago and rather than forming their own division, they went to us. There's also the possibility that a game client on Zodiac might also want the games to have an online component and we can provide that. So this allows us to leverage each company across our respective areas."
"The platforms for advergames are expanding, too. Burger King did a group of advergames on the Xbox 360 recently that were very successful. Clients are looking for other platforms, like cell phones. As more people get on broadband, we can do larger games; our original game was 32k, due to the constraints of download speed at the time, but now we usually do 3MB. So we can keep upping the quality."
"If you're on a console, you're likely inside a purchased game," he said turning to different platforms. "You can have something like branding on a sneaker or a billboard in a sports stadium, but you can't do fun things with a brand. Developing on a set top box is about the same as online. It's interesting because it keeps evolving, just like the Internet. For example, nobody could have predicted that YouTube would be as big as it is."
As for comparisons with models of in-game advertising on consoles, Kitchen had some very critical words, saying, "While Double Fusion and IGA have made some money on what they're doing, we think it's a strategic mistake to concentrate on console games. There are certain brands that will not go near console games because they're violent and you can't feed dynamic ads unless it's connected to the Internet, which most consoles still are not. So we feel the most appropriate opportunity for ads in games is with casual games, where you can generally offer a game for free with some ads."