Entering Virtual Worlds for Real-Life Pitches

Eric Pfanner

New York Times

May 29, 2008
 

IN 2002, when Electronic Arts signed a multimillion-dollar agreement with McDonald’s to place virtual burgers in an online version of its popular Sims video game, the move drew protests from players who resented the commercial intrusion.

A home in The Sims 2 is outfitted with Ikea furniture from what the game calls a “stuff pack.” The game’s maker, Electronic Arts, sees profit potential in such deals, and so do marketers.

But the Sims, a virtual family designed by players, are only becoming more brand-conscious. Starting in June, people who play The Sims 2, the current version of the game, will be able to buy a “stuff pack” (on a disc or online) that lets them decorate their simulated families’ homes with Ikea furniture. Last year a similar deal was made with H&M, the Swedish clothing retailer, that lets players buy a disc full of H&M-branded clothing for their Sims avatars.

While most other “stuff packs” contain generic accouterments — one called “Glamour Life,” for instance, lets players pick from label-free furnishings and evening gowns — the Ikea pack will let players move items like the Ektorp sofa and the Leksvik coffee table into their families’ virtual homes.

Electronic Arts, the world’s largest video game company, said it made the deal with Ikea, the Swedish furniture manufacturer, in response to requests in online players’ forums for more modern, realistic furniture.

“Because we have such a direct relationship with our players, the players help shape the product strategy,” said Nancy Smith, president of the Sims label, which has sold more than 100 million copies.

The deal is yet another example of how the traditional lines between paid-for content and marketing material are blurring in the media world. Companies that sell products and services are increasingly eager to place their wares inside television shows and other media rather than relying on stand-alone commercials. Media companies like Electronic Arts, meanwhile, are looking to sponsorship deals to help recoup the growing cost of developing games.

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For marketers, the huge fan bases for some video games are a potentially rich target audience. In one recent blockbuster release, Grand Theft Auto IV sold more than six million copies in its first week. The Grand Theft Auto series is published by Take-Two Interactive, which Electronic Arts has been trying to buy, though it has persistently been rebuffed.

In addition to sponsorship agreements like the Ikea-Sims deal, game companies have been trying to sell advertising space and time in games, often on billboards or other elements of the virtual backdrop. In games played online, ad space can be sold across networks of games for specific time periods, as it is on television.

But analysts say that advertisers have been skittish about such ads, in part because of their limited reach. Some networks, for instance, work only with games played on a single system like Microsoft’s Xbox or Sony’s PlayStation.

Other advertisers may worry about placing their brands in controversial material. The Grand Theft Auto franchise is notorious for its violent and sexually laced content, and the latest title contains only spoof ads, for products like the “new iFruit phone,” which resembles Apple’s iPhone but is promoted with this pitch: “No buttons. No reception. No storage capacity. All ego.”

Michael Goodman, an analyst at the Yankee Group, said that last year, marketers spent about $180 million on in-game advertising, including sponsorships like Ikea’s deal. He has predicted that spending would rise to $332 million this year, but said he was considering lowering that forecast slightly, as growth seems to be slower than expected.

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For marketers seeking a safe environment for their brands, tie-ins seem to offer a measure of control. Also, by putting the name of the sponsor brand on the game’s packaging, they go beyond simple product placement deals like Electronic Arts’ arrangement with McDonald’s (a similar deal with Ford Motor allows people who play Sims online to download virtual cars at no charge).

“Ikea sees this as a new channel to reach the young and the young at heart,” an Ikea spokeswoman, Charlotte Lindgren, said in an e-mail message.

The “stuff packs” will cost about $20.

The Ikea partnership with Electronic Arts is similar to the deal with H&M, though that promotion also allowed players to take part in a fashion show. A winning design will be sold in actual H&M stores this summer.

Steve Seabolt, vice president for global brand development for The Sims, said Electronic Arts was pursuing similar arrangements with other companies. He declined to say which one might be next, but named as potential partners consumer electronics companies, like Philips, Electrolux and Sony, as well as brands like Starbucks, Dunkin’ Donuts, Pepsi, Coca-Cola and Borders books.

The Sims 3 is set to be released next year, with new features like a town center that has plenty of virtual storefronts (read: opportunities for advertising).

Electronic Arts and Ikea declined to provide financial details of their agreement. Mr. Goodman, the Yankee Group analyst, said that while advertisers typically pay for space upfront, in this case the two companies might have agreed to share revenue from sales of the software discs.

Mr. Seabolt of Electronic Arts said his company was willing to be flexible for marketers considering The Sims. “This is anything but a one-size-fits-all proposition,” he said. “We make a huge effort to sit down with clients and really understand their marketing objectives.”