Reuters: Technology News: Carmakers look to video games for new routes to market

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Carmakers look to video games for new routes to market Aug 22nd 2013, 07:13 A McLaren P1 is showcased during a presentation for the game ''Forza Motorsport 5'' during the Xbox E3 Media Briefing at USC's Galen Center in Los Angeles, California June 10, 2013. Credit: Reuters/Mario Anzuoni By Christiaan Hetzner and Harro Ten Wolde COLOGNE, Germany | Thu Aug 22, 2013 3:13am EDT COLOGNE, Germany (Reuters) - The spoiler popped up automatically when the speedometer of the new Audi RS7 Sportback moved past 130 kilometers an hour on Charles Bridge in central Prague, creating just enough downforce to ensure the tires gripped the road around the next turn. Racing through the city's scenic old quarter in the "Forza Motorsport 5" videogame is unnervingly realistic - not least thanks to the force-feedback steering wheel that makes the speeding driver struggle to keep control. The upcoming Microsoft Xbox One game is also just one example of an increasingly symbiotic relationship between software developers and the auto industry. Together they get games fans behind the wheel and carmakers in pole position to woo today's younger consumers as tomorrow's car buyers. Even if many of the players may not be able to afford to buy a car now, Volkswagen's Audi sponsors the game since it can start winning brand loyalty for the future. It is also well aware that driving games are not just enjoyed by the young. "It's not just about reaching the youth - an Audi in a video game also reaches our core target group. Unlike in a movie where there is a straight narrative, a video game is interactive and the storyline is not defined in advance," said Kai Mensing, head of International Product Placement at the company. Meanwhile Nissan competes on screens as a partner in Sony's rival PlayStation game "Gran Turismo", giving gamers the chance to enter a competition which starts with driving a Leaf electric car in their living rooms and could lead to actually racing a real 370Z sports car on Britain's Silverstone circuit. "We take you all the way through to being a racing driver," said Gareth Dunsmore, general manager for marketing in Europe, adding that its "GT Academy" finalist Lucas Ordonez went on to a real world podium finish at the Le Mans 24 hour race in 2011. Nissan's digital advertising spend has trebled in the last five years and is expected to top $500 million this year, roughly 25 percent of Nissan's overall advertising outlay. "GT Academy is a great way for us to attract the gaming community to the brand. A million people have experienced this year driving an electric vehicle in a game," Dunsmore said. PRODUCT PLACEMENT Consultancy PricewaterhouseCoopers estimates in-game advertising will be a $2.8 billion industry worldwide this year. Carmakers say it is cheaper than product placement in films and they can even collect licensing fees for handing over their vehicle specifications to game developers. Games industry analyst Brian Blau of Gartner, who once worked on licensing deals with carmakers, said auto companies are willing to pay as much as a million dollars if one of their cars is deeply integrated into the storyline of a video game, all the way down to appearing on the cover of the box. "Advertisers are very keen on these kinds of immersive technologies," he said. And carmakers need to stimulate demand amongst younger drivers. In Germany, Europe's largest auto market and home to major car companies like VW, sales of vehicles to younger people have been in decline, with official data showing the share of new cars sold to people aged between 21 and 39 dropping each year since 2009 from 19.8 percent to 16.2 percent currently. Whereas car sales have stagnated at around 3 million vehicles for years, video game sales in Germany rose for a third straight year in 2012 to a record 73.7 million. More importantly, over a quarter of the 26 million Germans that regularly played video games last year earn above-average incomes, taking home over 3,000 euros after tax every month. For carmakers this means an audience expanding in size, increasing in affluence and diversifying in its base, and experts agree that product placement in video games can be an extremely effective tool to promote a brand. "Gaming is a very engaging and captive environment that requires your full concentration. When people watch the Super Bowl on TV, however, they're multitasking - tweeting and commenting on their Facebook page throughout the game," said Dave Madden, senior vice-president of global media sales at games developer Electronic Arts. German psychotherapist Bert te Wildt knows first-hand just how powerful, and even addictive, video games can be compared to other mediums having researched gaming dependency. "The feeling of being behind the wheel of a fast car is far more intense when you drive it yourself in a digital world than when you watch it in a film, for instance," said te Wildt, a physician at Ruhr University's LWL Clinic for Psychosomatic Medicine and Psychotherapy in Bochum. "And now that these cyberspace vehicles are nearly photo-realistic, product placement in video games has become that much more attractive for carmakers," he added. CROSS-MARKETING And product placement is also attractive to videogames publishers. Microsoft's "Forza Motorsport 5" and Sony's "Gran Turismo 6" have been nominated for the best titles for the Xbox and PlayStation consoles at this week's Gamescom convention in Cologne and Daimler had its gull-winged Mercedes-Benz SLS parked in front of Sony's press hall this week to promote the upcoming PlayStation 4 title "DriveClub". But the automaker's interest goes well beyond racing games. Caroline Pilz, head of product placement at Mercedes, said a campaign last year with SimCity Social, a form of Electronic Arts citybuilding game that was played on Facebook until recently, far exceeded its expectations in boosting the awareness and image of its A-Class car ahead of a crucial relaunch. "Social gaming is a fantastic platform to go beyond the normal male audience that play racing games and instead reach females between 25-45 that don't read car magazines, who are in the perfect age to purchase compact cars like the A-Class," the head of product placement at Mercedes told Reuters. Apart from allowing gamers to share achievements with friends and other players, online connectivity offers carmakers the added ability to tout their latest models in software updates that include exclusive downloadable content. Just don't expect carmakers to have their vehicles driven around in September's hotly-anticipated "Grand Theft Auto V" game, since running over people with a BMW or Mercedes is not what the carmakers want to see. One developer who asked not to be named said his car game did not feature any pedestrians or bystanders at all. Even portraying vehicle crashes of the kind portrayed in Electronic Arts' "Need for Speed" is controversial, because it could spark safety concerns. "We have very specific understandings of how we would show damage to a car," he said. (Additional reporting by Rhys Jones in London; Writing by Christiaan Hetzner; Editing by Greg Mahlich) Link this Share this Digg this Email Reprints

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