Posted March 20, 2017
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Edit: Ehhh, yea, after re-reading, now i get it.... the game company is paying for the privilege to advertise the car manufacturers product.
Its very counter intuitive when you look around at all the money getting spent on advertising! Anyway, no company will take a lazy approach to advertising simply because they don't think many sales will come from gamers, that is absolutely not how any good company thinks.... they think in terms of how wide they can cast the net.
In other cases, it might work the other way around where say... Ubisoft offers a product placement in their video games such as Nokia phones and Coca cola placements on in-game billboards in Ghost Recon Advanced Warfighter. That type of product placement isn't going to draw more people to buy the game because it has Nokia and Coke ads. The game publisher in this case is saying to potential advertisers "This space available, contact us for rates to advertise your product." and in the case of GRAW, Coke and Nokia as well as some other companies stepped up to the plate and said "Here's a wheelbarrow full of money Ubisoft, please advertise our product in your game because our target market will be playing your game and the advertising will be beneficial to us even though it doesn't benefit you or your game in any way other than the wheelbarrow full of money we threw at you to compromise all that is holy in gaming by spamming gamers with in-game advertisements that do nothing to improve the game experience.
See how that works? Coke and Nokia need Ubisoft's GRAW game more than Ubisoft needs coca cola or Nokia advertising billboards in their game. As a result, the money goes from Coke and Nokia towards Ubisoft.
However, in a high end video game about driving race cars, the game itself is a much more appealing product if you can race in a Ferrari or a Lambo or some other 6-7 digit price tag car in-game, compared to driving a made up vehicle shape with a made up fake name designed by the game company. Those car brand names existing in the game as well as the shape and image of the trademarked vehicles, and the vehicle's own performance dynamics simulated as accurately in-game as in the real world to the best of the game designer's engine capabilities brings high value to video game players that want an authentic racing experience and the ability to do so in a name brand race car that is being digitally simulated. The game company desperately wants this in their game knowing that with it their game is automatically sold at a premium and will draw more racing enthusiasts and be taken as a more serious simulator product than a "fake" arcade game with nonsense made up cars. They don't go to the car maker and say "pay us to put your car in the game or we'll make our own fake cars instead and sell 1/100th of the copies of our product as a result". No, they say "we're going to shoot money at you with a catapult Ferrari in hopes that you even turn your head at us and accept our money for the glorious privilege to utilize your company's product name and vehicle design and performance dynamics in our simulator as this will dramatically boost the sales and profitability of our product, and you have nothing to lose out of the deal.
The money changes hands from the one who most benefits from the agreement, and in the case of a racing game - the video game publisher and developer are the ones who benefit from the right to use trademarked cars, not the other way around. Does the car manufacturer get some marketing mindshare and mental impressions from people playing the game? Sure they do, but so what. It isn't like millions of people are going to go out and buy a Ferrari after playing GRID or something.
Is this genuinely confusing to understand? If so, stick to whatever you do for a living and don't go into entrepreneurship. Trust me. :)