Microsoft To Buy Massive

Microsoft plans to buy in-game advertising company Massive Inc.

The deal, first reported by the Wall Street Journal (subscription required), is valued between $200 million to $400 million. Microsoft plans on officially bowing the deal next week. Massive’s current clients include Coca-Cola and Honda.

Massive's business model involves placing dynamic ads in video games such as on billboards or soda machines that can be updated via internet.

It remains to be seen whether videogame ads can help Microsoft's broader advertising goals. The videogame-ad market is growing and has garnered much interest among advertisers and game publishers. For now, though, it's small. Advertisers spent about $56 million on advertisements in videogames last year, up from $34 million the prior year. But a recent report by the Boston research firm Yankee Group predicts the in-game advertising market will reach more than $700 million by 2010. Yankee Group also predicts the number of games with advertising in them will double by the end of this year to more than 200.

Let’s just hope developers keep advertisements reasonable. When they start to put soda machines in medieval role playing games for the slamming ye olde Mountaine Dewe, it will be a sad day indeed.