Officially announced in New York yesterday, Microsoft has decided to shutter it’s in-game advertising unit, Massive. According to Microsoft, the technologies developed for/at Massive will be redeployed to their first party ad business, with an initial focus targeted at gaming. Redmond will wind down Massive’s operations, with the brand disappearing by years’ end.
The future of the now closed company will eventually expand it’s offerings and technology to other Microsoft opportunities, but the decision comes in the wake of Microsoft’s decision to work closely with the Interactive Entertainment Business (IEB) and continue developing and expanding the technology employed under the Massive banner. This development will seek to meet the needs of first-party gaming advertisers on Microsoft properties such as Xbox LIVE and MSN Games.
The news of Massive’s impending sunset arrived at the beginning of this month, with Adweek breaking an exclusive reporting the news, with sources coming from inside the company. According to author Mike Shields, Massive general manager J.J. Richards had already started looking for a new job, and that the reassignment of Massive employees had already begun.
According to Shelds’ sources, it’s rumored that Microsoft had been shopping Massive around to potential buyers, least of which included competing in-game advertising firm Double Fusion. Microsoft had been seeking a high six, low seven figure deal – a deal Double Fusion obviously passed on. To put this figure into perspective, when Microsoft acquired the ad agency in 2006, they paid anywhere between $200 – $400 million according to estimates.
Noted above, Microsoft already has an Interactive Entertainment Business unit, and while Massive held it’s own niche specialty, at the end of the day, it appears as though Microsoft was unnecessarily duplicating it’s efforts. Meaning, in 2006 when they purchased Massive, the topic and industry were red hot, with then Massive CEO Mitch Davis prediction that the in-game advertising industry would be a $2 billion market by 2010, a figure that’s never been realized. The rise in popularity with both gamers and advertisers of central “Hubs” such as Xbox LIVE for Microsoft and Home for Sony have contributed to Massive’s demise. Add to this the fact that via Xbox LIVE, Microsoft can keep the entire advertising dollars pie, while via Massive, they’re contractually obligated to share some of this pie with advertisers, the decision to close down shop at Massive was only a matter of time.
While it’s sad to see any firm close it’s doors, it should be interesting to see what the now re-deployed Massive team can do for Microsoft’s Interactive Entertainment Business. Surely, years worth of know-how and experience are sure to trickle their way into new Microsoft offerings.
Tags: IGA, in-game advertising, Massive, Microsoft
