Video games - The future testing grounds.

I've never been into video games. I'm willing to bet that most of you reading this have not either. But we all better start paying attention, not for the obvious reasons like the fact that gaming is one of the fastest growing billion dollar industries, or that it is fast becoming a medium in which brands can advertise in.

There are more subversive 'going's on' - going on. The games with the fastest growing audiences are communal in nature, with the online communal component playing the most important part. These games are becoming less like games and more like constructions of alternate societies living on the web. While the environments are fantasy based, they are all grounded in realities we are familiar with. You pick a character, live a virtual life, earn points for that life, are able to buy virtual land, build virtual companies & make new friends in the process. Think of them like a much more complex, 3-dimensional version of Monopoly. But, like life, the game never ends - it just keeps evolving.

As marketers, we need to pay attention as this is fast becoming an effective, measurable new medium. A new survey, conducted by Nielson Interactive and Double Fusion, says that in-game advertising yields significantly better results in product awareness and purchasing decisions simply because the user is engaged; with a 60 percent improvement in new product awareness, and that 3D advertising creates nearly twice that of static 2D billboard advertising. The spending for online gaming advertising is from USD 35 million in 2004 to a forecast of USD 875 million by 2009, growing to somewhere between $1.6 billion and $1.8 billion in the U.S. by 2010, or roughly 3 percent of total media spending. I think it is underestimated, much like the web.

But there is more to it than that. Think of this as a virtual testing ground. If I owned a large media or consumer research company, I would want to buy a piece of one of these environments, simply to test the receptiveness of my clients brands and campaigns. If I had enough money, I may even want to build an envirmonment of my own. Some product companies are looking to subsidize the virtual development of a line of products within these games. Good for the game, and good for the company wanting to see if a new innovation gets any interest before they actually prototype or manufacture it.

Sort of like how the military uses gaming to test new weapons & strategy. Seems crazy, but it makes sense.

Pharmaceutical companies are looking into gaming to help patients. For example, many patients recovering from a severe car accident suffer from severe trauma. it has been proven that patients recover from the trauma and are much more receptive to getting back into a car if they have been 'practicing' driving within the confines of a game first. Something as simple as racing game works.

For something as intangible as cancer, there are games in development to help child cancer patients visualize the disease and actually fight bad cells with good cells. Initial testing shows that the visualization helps the child’s immune system and may have a significant effect in the receptivity and understanding of the treatment.

Why not tie brands into these applications. The consumer wins as funds from the brand go to developing better 'games' with research that helps patients. The brands win, by giving back and being associated with these free forms of assistance.

There are even games taking on real world political issues. The game below allows students in the middle east to actual battle it out in a virtual environment. Clearly something most brands would want to steer clear of...but you get the point.

Students fight for Mideast peace in video game
http://www.cnn.com/2006/TECH/fun.games/04/24/serious.games.ap/index.html?section=cnn_tech

Gaming demographics have also moved well beyond the 18-34 male. Women are the fastest growing demographic within online gaming and studies have also found that because gaming keeps the mind sharp, the elderly in Asia are 'excercise' their brains with gaming. Another cool opportunity for Pharma companies to give back.

Japan’s Elderly Rides the Brain Craze
http://www.wired.com/news/wireservice/0,70640-0.html?tw=rss.technology

But here is where it gets really exciting. The 'value' created within these games is taking on real world value. On one of the games, a user paid another user $100,000 US to buy a piece of property that was already 'developed' by the first user. It had taken the first user many years and many points to be able to 'build' this virtual property and so had virtual value to someone who did not want to spend that time doing the same. This piece of property (space station), was receiving visits from thousands of other users. The purchaser 'developed' areas within the property where users could have fun (games within the game). He even 'rented' off retail areas for other game-players to create smaller versions of commerce. He also sells advertising space to brands. The space station is now generating $12,000 a month in real revenue. But the money is virtual right? Wrong! Remember, real dollars were paid for the ‘property’ in the first place which means there is real value. So, the gaming company is now creating an ATM card that you can use to get actual cash or use online like PayPal...and so real value is created, generating real opportunities for brands.

Below are articles and links to two of the most exciting online gaming communities. Enjoy!

Second Life
http://www.secondlife.com

Entropia Universe Players Can Cash Their Online Earnings at the A.T.M.
http://www.nytimes.com/2006/05/02/arts/02entr.html