It looks like Tim Chang’s predictions on what’s hot and what’s not in the gaming industry are already proving to be right on the money.  Or lack there of in this case.

Late last week, Dean Takahashi reported on a response the VentureBeat team received from IGA Worldwide chairman Justin Townsend, confirming that the Gordian Group has been hired to keep the company afloat, either via a new injection of capital, or a possible sale.  Townsend says that the company’s preference would be to finish closing a third round of funding, but that IGA Worldwide also has a financial responsibility to it’s shareholders to consider selling the firm.

The Gordian Group has set a deadline of March 27th for interested parties to submit their bids, and Townsend remains adamant that no “low ball” offers will be accepted.

IGA Worldwide and Townsend find themselves in a rather sticky situation.  While the gaming industry has been one of the few areas to remain (relatively) untouched by the global financial crisis, IGA Worldwide specializes in advertising, an area that has taken quite a beating since September.  Townsend admits that times are tough, and that IGA Worldwide laid off 25 percent of their staff in November, staffing the firm with approximately 45 employees.

While the privately held company does not release it’s financial data, according to a VentureBeat source, IGA Worldwide lost close to $11 million on revenues of $3 million in 2007.  IGA Worldwide then projected to lose $26 million on revenues of $3.4 million in 2008.  Townsend was quick to comment that the firm did not, in fact, lose all of that projected cash, as is renegotiated deals with game publishers and platforms.  Townsend also admits that IGA Worldwide had previously guaranteed payments to publishers in exchange for the rights to insert ads into their games.  These agreements simply no longer made sense after the economic collapse made revenue projections unrealistic, says Townsend.

“We had to sit at the table and come up with a new business model that worked for all parties,” Townsend said.

Since being founded in 2004, and launching their first series of ads in 2006, IGA Worldwide has worked with top brands including IBM and McDonalds.  They have raised more that $46 million in two rounds of funding from investors including Morgenthaler Ventures, Itochu Technologies, Translink Capital, Sumitomo/Presidio STX, Easton Capital, DN Capital, Intel Capital, GE/NBCU’s Peacock Equity fund, and KTB Ventures.

Now this is an interesting story to watch.  IGA Worldwide, one of the biggest players on the in-game advertising circuit, is on the rocks.  Will they in fact land more capital and continue forging on through rough waters?  Or, will Microsoft’s Massive, recent news makers Double Fusion, or the big G (Google) step in and snatch IGA Worldwide up and include it in their growing Adsense for Games project?

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