The Guardian Gamesblog has a look at alternative funding models for gaming companies. They give their thoughts on in-game advertisement, episodic content and the Hollywood model, where game companies keep small staffs and simply contract freelance artists and designers for each game. Here's some of their thoughts on in-game advertisement:

As uncomfortable as it makes many gamers, opening up the computer games platform to big corporates as a way to get eyeballs on brands can be a very lucrative trade-off for developers. Digital luddites argue including billboards or product sponsors into virtual environments breaks the immersive quality of gameplay - and certainly this is true if the advertising is implemented in an obtrusive or nonsensical way - but those thousands of dollars could provide a cushion for an ailing developer and may be a lifeline for a future, more innovative project. Immersion could even be increased, as appropriate advertising may enhance the agency of the player.

We think most gamers are amenable to in-game advertisements but they expect advertisements to make game prices go down. Most other advertising-financed media is either free (for example, Kotaku) or extremely inexpensive in comparison to the $50 or $60 expense of a game. Keeping game prices the same and then making additional money by subjecting us to ads during our escapist gaming sessions feels somehow like an insult.

A great example of an otherwise excellent game company that squandered a lot of good will by doing this is Irrational. They released SWAT 4 at full price then patched in-game advertising in. Gamers who might otherwise have felt strongly enough against in game advertisements to boycott the game therefore couldn't do it. It was a cheap, cynical and shady move from an otherwise great dev house.

What do you guys think?

Alternative funding models Part 1 [Guardian Gamesblog]

Contact information for this author is not available.