In-Game Advertising Is Perfectly Well Understood

While this is not exclusively a games blog, my primary focus is on video games and game development. My last several posts have been of a markedly non-game nature, so let’s return to our roots, shall we?

Today, GamesIndustry.biz reports on Ed Bartlett, co-founder of in-game advertising agency IGA Worldwide, asserting that advertising is misunderstood by game developers and publishers. He defends the use of in-game ads, suggesting that they actually increase creativity:

“There is so much emphasis on creativity for most brands today that I would argue that in-game advertising will actually promote creativity in games, not reduce it.”

How does this work? Bartlett provides the example of early television advertising, where a particular broadcast would have a single sponsor which might pull its advertising dollars if it didn’t agree with the content of that broadcast. This total reliance on a single sponsor clearly chills creativity. Games, by contrast, do not rely on a single sponsor; in fact, most of their development costs are paid by publisher investment, and many games are fully-funded without advertising sponsorships of any kind.

This explanation has me raising an inquisitive eyebrow. Bartlett seems to argue that in-game advertising increases creativity, but as far as I can tell it only doesn’t chill creativity.

These are not the same concept.

Bartlett is propping up a straw man here: disdain for in-game advertising has never been about chilling creativity, because the industry at large has never had to deal with a single-sponsor model. The opposition to in-game advertising is entirely directed at its effect on the user experience.

Simply put, we play games to escape from real life. Yes, even “realistic” games are played for this purpose. When I’m busy enjoying my escapist fantasy, the last thing I want is McDonald’s, Coca-Cola, and Ford crashing my party. I did not pay $60 to learn how Axe Body Spray helps me pick up chicks (LOL) or how much money I can save on car insurance by switching to Geico.

If you’ll please excuse me, I just want to blow the shit out of some aliens. You can advertise to me when I return to the real world.

The $700 Billion Question

I’ve been giving some thought to this mother of all bailouts these last few days, and it seems to me our government is allocating our $700 billion to entirely the wrong place.

These companies are on the hook because they leveraged themselves against the outstanding debts of their customers. This is not, in and of itself, an unusual or bad thing: a lender gives money to a borrower under the condition that it will be repaid in installments, plus interest. The lender then proceeds to spend these installments; the lender has not actually received the money yet, but it will have, in time for it to settle its own debts.

But sometimes those installments aren’t received. Responsible institutions have contingency plans for this, but the lender didn’t expect so many loans to default so quickly. Now it finds itself on the hook for its own debts, and lacking the capital to settle them.

Why did the lender’s revenue stream dry up? It may seem rhetorical, but the answer is simple: borrowers were (and are) unable to pay their debts.

If the borrowers were enabled to pay their debts, the lenders’ revenue stream would reappear. With this influx of money, the lenders could settle their own debts.

The lenders don’t need capital, they need income.

So, who are our borrowers? A lot of them are homeowners whose variable-rate mortgages have recently adjusted upward, resulting in unmanageable monthly payments. They are probably trying to sell and move somewhere more affordable, but they owe more than the property is worth and don’t have the assets to make up the difference. This situation is not uncommon:

Almost one-third of U.S. homeowners who bought in the last five years now owe more on their mortgages than their properties are worth, according to Zillow.com, an Internet provider of home valuations.

Second-quarter home prices fell 9.9 percent from a year earlier, giving 29 percent of owners negative equity… For those who bought at the 2006 peak of the housing market, 45 percent are now underwater…

The current bailout proposal wants to give our $700 billion to the lenders in this situation. (As an aside, it also wants to give some of that $700 billion to lenders who are in fine shape, and others that aren’t even based in this country… and it wants to do it all with absolutely no oversight.) The running theory is that this capital infusion would allow the lenders to settle their debts, saving them (and the economy, by extension) from collapse.

This proposal won’t solve anything; it will merely delay the inevitable. The lenders will spend our money and settle their debts, but they still won’t have any income. We’ll be right back in this mess in six months or less, and $700 billion poorer for it.

Instead, I propose that our $700 billion forms a fund to help U.S. homeowners get out from under untenable mortgages. In short, the fund would cover some or all of the difference between the owed amount and the fair market value of the home, based on homeowners’ need and ability to contribute. This naturally requires the sale of the home, which must be closed with a standard, fixed-rate mortgage. (We cannot inject any more of this toxic subprime bullcrap into the system.)

With this “bottom-up” approach, borrowers (homeowners) are enabled to pay their debts. This restores income to lenders, restoring them to solvency. Nobody collapses, nobody goes bankrupt. Homeowners that borrowed beyond their means still lose those houses, but are left able to find lower-cost housing more appropriate to their income. Lenders receive only the money that is owed to them, and not a cent more; their own business practices will determine whether they can survive or not. The housing market is allowed to self-correct, bringing home prices down to a sustainable level, and confidence is restored in the stock market as the frequency of home-loan defaults falls.

I’m no economic guru, but the answer to the $700 billion question seems clear: use the taxpayers’ money to help the taxpayers, not to bail out greedy corporations so they can return to business as usual.

Senator John McCain claims the fundamentals of the U.S. economy — the American workers — are strong. Well, here’s a plan to make them stronger.

It’s On Like Donkey Kong!

The Electronic Frontier Foundation is suing the federal government today to stop unconstitutional wiretapping and monitoring of telephone and digital communications, as revealed in today’s announcement of a press teleconference on the issue:

The Electronic Frontier Foundation (EFF) will file a lawsuit against the National Security Agency (NSA) and other government agencies today on behalf of AT&T customers to stop the illegal, unconstitutional, and ongoing dragnet surveillance of their communications and communications records.

The five individual plaintiffs are also suing President George W. Bush, Vice President Dick Cheney, Cheney’s chief of staff David Addington, former Attorney General and White House Counsel Alberto Gonzales and other individuals who ordered or participated in the warrantless domestic surveillance.

I’d just like to take a moment to say how glad I am that organizations like the EFF exist. Thanks guys, keep up the good work, and best of luck!

Hopefully this lawsuit will produce some silver lining amidst all the pure shit that’s been going on in this country lately. If nothing else, I’m glad to see someone hit back after Congress’s ridiculous decision to grant amnesty to the telcos.

Elk!

This weekend I went back up to Soldier Summit for one last visit this year, and we finally managed to attract a herd of elk.

There are pictures!

From Soldier Summit

From Soldier Summit

From Soldier Summit

And video!

X-COM on Steam!

The entire X-COM series is available today on Steam, reports Rock, Paper, Shotgun. And according to the discussion on ShackNews, they even run properly on Vista!

$5 per game, or $15 for the whole series.

I… I am so happy right now. <3