Today, Sony officially announced an in-video-game advertising deal with IGA Worldwide – leading to numerous negative blog reactions. The boldest was by Don Reisinger at CNet with his “In-game advertising will ruin the video game industry” article:

In-game advertising not only ruins the experience of playing games, but it makes for a title that “sells out.”

Think about it — how many times have you played through Guitar Hero III and the entire Tony Hawk franchise wondering where the developers went wrong? Was it really necessary to drop the name of another product? Did we really need that extra banner behind the artist’s head?

Of course the answer is no, but we’re still being annoyed with in-game advertising for no real reason. Sony wants us to believe that we will benefit from it because it’ll not only provide us with knowledge on a slew of new products, it’ll increase developer revenue, helping create better games.

I’m motivated to respond not because I am a big gamer (I’m not) – but because this reaction is strangely common for new, controversial innovations (and this is an innovation). In-game advertising might prove to be a massive failure. It also might prove to be the next AdWords platform and an opportunity to engage with active game players. We won’t know unless Sony tries.

More importantly, it’s an open market and the market will solve itself. If Sony moves forward too quickly and pushes ads too aggressively, the video industry won’t conclusively fail… it will have to adapt to the poor reviews and sales… and it will re-innovate.

Likely what will happen is that Sony will move with baby-steps and leverage their online-platform to swap units in, collect results, and gather data. And Sony is probably a better platform to test with than XBox – after all, PS3 Online is 100% free and overwhelmed with users. Perhaps an additional business opportunity to sell ad-free online play? Maybe Don Reisinger would be willing to pay a few bucks each month for that?

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