Spending on game advertising in the U.S. is forecast to grow from $370 million in 2006 to over $2 billion in 2012, according to a report by Parks Associates.

In-game advertising is predicted to achieve the highest growth rate, from $55 million last year to over $800 million in 2012. The anticipated compound annual growth rate of game advertising is 33 percent, far exceeding that of television, radio, print and internet advertising.

Yuanzhe Cai, Parks Associates Director of Broadband and Gaming, said, “Advertising in electronic games had an average monthly household expenditure of less than 50 cents in 2006, while broadcast TV was at $37, meaning advertisers are not using the gaming medium to its full potential. If executed correctly, game advertising can provide a win-win solution for advertisers, developers and publishers, console manufacturers, game portals and gamers.”

In-game advertising is a potentially important new revenue stream for the game industry, helping publishers offset continually-growing development costs and giving developers the opportunity to take greater risks with future game designs. Some reports have estimated that in-game advertising could an extra $1-2 of profit per unit sold, a significant amount given the low $5-6 profit per unit sold that publishers typically see.

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