Sony have agreed their first in-game advertising deal this week with IGA Worldwide to open up this so far untapped revenue potential for the PS3. IGA already serve hundreds of millions of ads a week within premium retail pc and console games and have no added PS3 gamers to their reach.

Sony have sold around 12 million PS3 units across the globe but have so far been slow to move with launching in game advertising partnerships, despite forming the In Game Advertising Business Unit back in November. Despite being quiet on the subject since then a lot of their time must have been spent defining what this relatively new industry exactly is, how it works technologically across the PS3 network and most importantly how it can become a new stream of revenue for Sony without being garish and off putting to the player. Now that the first deal has been signed others are sure to follow, as the IGA deal has no mention of exclusivity.

Meanwhile IGA have signed a separate deal with EA to run dynamic ads across a number of their titles on the PS3. Similarly EA signed a deal with Massive, Microsofts in-game advertising unit. Both deals are 2 year deals, with other long term partnerships likely to be normal practice, mainly because as an ad network you need a guaranteed period with which to sell ads to fulfil a profitable business model.
EA titles to be included within the PS3 deal are, predicatably, the EA Sports franchises of Madden, NBA Live, NASCAR racing, and NHL hockey, plus Need for Speed and Burnout - all the usual suspects really. Ads themselves will include posters, fliers, billboards, megaboards hanging down tall buildings as well as digital billboards. IGA also have the ability to render 3D objects giving the potential for other more exciting advertising opportunities.

The launch of in-game advertising was a well known side effect of the next generation of gaming, with an emphasis on up-to-date information, network play and detail and scale never seen before. I personally don't have a problem with it but have 2 main issues that are potential stumbling blocks for me. Firstly, will it become over the top and obvious product placements and advertisements that take away from the game play and surroundings within the games themselves? In other words - will it become overpowering and how will they moderate the level of advertising in games?

Secondly what will the gamers get out of it? Sony, Microsoft and EA will all be profiting from me playing games (ok, ok I know they already do just from me buying it) but will we see a price drop because games come with more advertising in? Will we be able to get free upgrades, downloads or new maps for games as a result? The extra money the games companies are generating from in game ad sales I think is great overall, the issue of second hand games sales and piracy are well known to take money out of the industry and this is a good new stream of revenue. But what will they do with the money? I'd like to see it go to two places. Firstly reinvestment to make bigger, better and faster games. And secondly reinvest it in the gamer - free map packs, bonus levels, upgrades, demos and more.