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Advertisements to become Steam function

But not in Valve's games? :: May 19th, 2007 :: Features, Steam updates :: 18 Responses (Feed)

Counter-Strike’s in-game adverts are the pilot for a Steam-wide system Valve intend to offer to independent developers, Gabe Newell has explained in an interview with GamesIndustry.biz:

Counter-Strike in-game advertising
Subtle.

We’re looking at a variety of ways of funding these development projects and it probably benefits us less than other kinds of developers. … I think where advertising-supported projects will be interesting is the degree to which it … [helps broaden] the distribution of games like Red Orchestra. I think that we’re going to start to see games that would struggle to get traditional publisher funding find that advertising is a great way of finding and developing an audience, and that’s why we’re putting the effort to make it possible for people to use Steam to do advertising-supported games.

Valve clearly aren’t too interested in running the adverts themselves, although quite why they waited so long to tell this to their very upset community is a question I’ll leave to them. We now know that:

  1. Adverts are unlikely to appear in other Valve games or in Steam itself, and
  2. Once the system is running smoothly they may be removed from Counter-Strike

There’s more good news: thanks to Valve’s policy of never releasing Steam sales figures, any developer wanting advert support in their game will have to integrate their code with Steam further than they may have felt necessary before. Advertisers need accurate impression data to determine a fair rate, and from the standalone Kuma\War we can be fairly sure that that, at least historically, Valve haven’t seen fit to compromise policy for their clients.

The figures that Valve do release are online playercounts and gameplay statistics, both of which require the game to hook into Steam. Even if you’re dead set against adverts, at least their requirements will encourage a deeper level of Steam integration than we are seeing today; master server integration logically leads to server browser compatibility on clients, and statistic gathering has a host of benefits even without a direct end-user bonus.

Valve partnered with IGA Worldwide to develop the Counter-Strike system, but it’s not clear whether they are still involved now we know that Valve are either planning to build — or have been building the whole time — the delivery framework into Steam itself. I had assumed IGA’s backend was being used, but now it seems that they may just have mentored Valve’s design, or perhaps licensed their software and tools.

Out of the frying pan

Gabe continues with his solution to one of an independent developer’s biggest problems: getting off the ground without publisher or venture capitalist funding.

What I would hope to see is that small developers can give away their titles for free and garner ongoing development support by generating advertising revenue, and we’ve done all the work to make that possible through the work that we’re doing in Counter-Strike. That’s certainly the hope. Another aspect in addition to broadening monetisation options and funding options, especially for new developers, is the possibility of segmenting your audience. So any time you can give people more pricing options, that’s always been a good idea. Some people will prefer it one way and some people will prefer it the other way, but it really requires us – especially as the technology provider that a lot of developers are starting to depend on – to do it first and get it out there, work out the kinks in the system so that they can then use it to trial things themselves.

Advertising is likely to be better-accepted in indie games, especially if it leads to free releases. But are advertisers that much better paymasters than publishers? They might not have you held in a contract, but if you don’t produce the game their target audience play they will happily leave you for someone who has.

If you don’t produce the game their audience play, advertisers will happily leave you for someone who has

Which a bit of an issue, because the kind of independent games that are distributed through Steam are by and large no good to advertisers. Poker Superstars II and Zen of Sudoku are the only titles in that list that have audiences definable beyond the “gamers” group that Steam covers by itself; everything else has such a niche market that targeted advertising would be all but impossible.

Valve acting as a proxy, accepting Steam-wide advertiser contracts and distributing them evenly among their participating clients, may be a solution, but when we consider the lower rates, fewer impressions and greater player aggravation non-targeted adverts would lead to it suddenly becomes much less appealing. Perhaps some cashflow could be set up in that environment but certainly not enough to justify a game of any quality being flat-out free. Gabe’s implied solution of providing free advert-supported and paid advert-free versions doesn’t do much to counter this situation; its obvious variation, advertising in your demo, makes financial sense but stacked alongside demo restrictions stands a strong chance of discouraging potential buyers.

Valve clearly think they have a workable system however, and they are the ones sitting on the important data. Perhaps their strategy will be hosting games aimed at the lowest common denominator, the market that the mass media (and Kuma Games) have found profitable, but it’s far more likely that we’ll be surprised with a holistic solution that goes some way toward pleasing everyone. That, or the entire thing will be a waste of time!


18 Responses to this post:

9 Comments

  1. hahnchen Says:

    The in-game ads on Counter-Strike are so poorly done, little thought has been put into the placement other than to maximise advertising impressions. Whereas maps such as cs_backalley and cs_office could facilitate realistic and effective ad placements, de_aztec cannot.

    In-game advertising is inevitable, we’re all capitalists after all, and I do think it will be a strong source of recurring revenue for smaller games. But it really has to get a lot better. In game advertisements would have worked well within the Sin Episodes environment, mixing fictional brands with real world examples. They’d have to get it right of course, instead of posters for New Coke Zero, they could advertise it as an established brand in the near future. It’d also allow for more intrusive Minority Report style adverts, and get away with it, as it adds to the atmosphere and environment.

    I actually think Natural Selection 2 could benefit from in-game ads. Don’t put them anywhere in any of the levels, but have them in the abstract lobby rooms. We know that small studios such as Unknown Worlds are quite often strapped for cash, and I’m sure the players won’t mind if the adverts are unobtrusive.

    I’m not sure what you mean when you say Valve does not release Steam sales figures, they obviously will to in-game advertising agencies looking to use Steam.

  2. Tom Edwards Says:

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