Video game giant Sony Group Corp (NYSE:SONY) could be increasing the number of ads in its games.
What Happened: Sony is building out an advertising platform that could allow companies to buy ads inside PlayStation games, according to a Business Insider report.
Sony is currently testing the initiative with adverting technology companies.
Currently, PlayStation offers advertisers space to show ads in places such as the PlayStation store, in-menu ads and ads for streaming video partners like Hulu.
Ads could be shown in games as part of the storyline, with an example being digital billboards in sports games.
Sony has been working on building out the advertising platform since introducing its PlayStation 5 console and could launch before the end of the year, according to the report.
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Why It’s Important: The news from Sony follows a similar exploration phase by gaming rival Microsoft Corporation (NASDAQ:MSFT), owner of the Xbox platform.
PlayStation could offer an incentive for free-to-play game developers as a way to monetize its games.
The report for PlayStation says the company could reward users who watch ads with items including in-game avatar skins.
Unlike Microsoft, which said it will not take a cut of the revenue and use it as an incentive for gaming partners, Sony has not yet decided if it will take a cut.
The battle between Xbox and PlayStation could heat up with both offering advertising revenue to gaming partners and it could become a battle of who is first. The Xbox platform could come in the third quarter, which would likely beat Sony’s current timetable for the PlayStation.
Advertisers would likely be interested in reaching the gamer audience, which is typically harder to reach, according to Zero Code managing director Dario Raciti.
“It’s a new thing, just like the metaverse, and everyone rushes to try it out, but for the people who have done gaming and understand the gaming audience, we’ll apply a wait and see approach,” Raciti said.
SONY Price Action: Sony shares are down 0.98% to $88.21 on Thursday afternoon at publication.
