Microsoft (Microsoft) – Access to Microsoft Corporation reports is quietly moving forward.
The software giant is the only company that can keep pace with Apple (apple) – Get the Apple Inc. report. The iPhone maker ended up with a market cap of $2.71 trillion, but if the team led by CEO Tim Cook succeeds in attracting everyone, that’s not the case with Microsoft.
The maker of the Windows operating system has a market cap of $2.1 trillion, making it one of two companies — the other being oil giant Saudi Aramco ($2.26 trillion), that can currently catch up to Apple.
Unlike its California rivals, Microsoft doesn’t like the spotlight. The company, co-founded by Bill Gates and run by CEO Satya Nadella, appears to prefer to let its products and services speak for themselves rather than make flashy announcements.
One of the few times Microsoft has made headlines outside of its financial results this year is when the company announced the acquisition of video game publisher Activision Blizzard.ATV) – Received Activision Blizzard’s January report of $68.7 billion. The acquisition, the largest in the group’s history, is under scrutiny by regulators.
Advertising in video games
The Xbox maker is now quietly exploring a new opportunity.
According to Business Insider, Microsoft is creating a program that will enable companies and various advertisers to advertise in free-to-play Xbox games. The outlet, citing people familiar with the matter, added that these in-game ads could appear as digitally rendered billboards in racing games.
The company is considering creating a private marketplace where only selected brands can buy ad space and display ads in a way that doesn’t disrupt gameplay. The goal is to avoid an outcry from players.
“We’re always looking for ways to improve the player and developer experience, but we have no further sharing,” a Microsoft spokesperson told TheStreet. The spokesperson did not dispute the report.
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However, if Microsoft restricts advertising to free-to-play games, protests for such an initiative could be reduced.
The freemium business model offers consumers free access to some games to entice them to subscribe to more polished and paid games.
In contrast, free-to=play games allow players to enjoy almost the entire downloaded gaming experience at will. Publishers of free-to-play games earn revenue indirectly from advertisers: product placement, integrated ads, and even development funding, in the case of ad games, called ad games).
Earnings can also come from players themselves, players can personalize their avatars when they get cosmetic skins; credits can be replayed faster as some FTP games require players to wait before playing again; even virtual objects, which are Advantages in competitive games. (The latter revenue stream, also known as pay-to-win, has been particularly criticized by players.)
How does it benefit Microsoft?
Paid item packs with random content are also now common, based on a playing card model called a loot box.
According to Business Insider, Microsoft has no intention of cutting costs. The company plans to let developers and ad tech companies share this ad revenue.
In this case, why would Microsoft take such a risk to alienate certain players? One possibility is that Microsoft, which aims to acquire Activision Blizzard, hopes to lure developers by offering them an additional revenue stream.
While the software giant has yet to reach out to advertisers to inform them of its plans, it still plans to launch the new service in the third quarter, according to Business Insider.
Many brands may be interested because they will be reaching audiences that would otherwise be difficult to reach. In addition, video game players are accustomed to paying for items and other services that they believe will enhance the experience.
