At E3 Event: Adaboy Says Advertising Inside Games Will be Key to High Quality Free Games in the Future.

Business Editors

E3Expo 2000

LOS ANGELES--(BUSINESS WIRE)--May 12, 2000

When it comes to computer games, shareware may be a thing of the past, replaced by a new financial model that puts an ever-changing array of advertising inside the game.

At this week's E3 Electronic Entertainment Expo, Craig Campbell, president and CEO of Adaboy, Inc., shared with game developers a new, advertising-backed revenue model that pays developers each time their games are played - letting them bypass retail shelves and the need for expensive marketing programs.

During a panel discussion about funding start-up companies, Campbell acknowledged what developers already know: it's getting too expensive to make high quality games that actually make money. "The shareware model rarely pays off, and the retail model only works for a few," he said. "The Adaboy model creates a sustaining revenue stream, because the game maker receives a portion of the revenue provided by the advertiser every time the game is played."

Campbell said that the copying and sharing of games by consumers "is suddenly in the interest of everyone, because the more players you have, the more everyone wins." Presently, the practice of copying software without paying for it is called piracy.

The new revenue model is made possible by Adaboy's patented Targeted Message Technology(TM) (TMT), which seamlessly inserts ads within two- and three-dimensional environments and chooses which ads to present based on data supplied by the player during log-in. TMT tracks the number of exposures of each ad, and advertisers pay only for the precise number of targeted users reached. TMT appeals to advertisers because of its efficiency, according to Campbell, and game developers from the U.S., Europe and Asia have expressed interest in its revenue-generating ability.

First Games to Use Adaboy Model Available Online

Campbell encouraged developers attending the workshop to sample the independently produced games using the Adaboy model that are just being released on the company's Web site. The online games can be played without a browser window. In at least one game, Matrix from KO Interactive, a virtual billboard appears within 3-D space and appears to move as the player's point of view changes. Other current games use 2-D ads within the game space.

For game developers and publishers, incorporating Adaboy-facilitated advertisements into games involves simply installing a software module that enables the display of virtual billboards by the game's existing engine.

In the case of Adaboy's game developer partners, that added revenue means they can offer high quality games for free, so players benefit as well.

"I don't think even Adaboy fully appreciates the potential of this new revenue model," said Paul McCarl, owner of Wyvern Studios and developer of several new games that use the Adaboy system. "Last year, we offered over 30 shareware games and our annual revenue topped out at $425,000. With Adaboy, just one of our games could potentially generate more than that in a single year."

KO's Matrix and a selection of card and edutainment games from Wyvern Studios can be found on Adaboy's Web site (www.adaboy.com).

"A further extension of TMT(TM) will use actual product images - for example, health drinks that provide `power-ups' to players," said Adaboy Chief Technologist Bill Heckel. "But in all cases, the modularity of the technology allows the images to be different depending on the demographics of the player."

Adaboy, Inc. is a Pittsburgh, Pa. -based company with several patents in the field of virtual environments. Founded in 1996 as Virtual Motion, Inc., the company was renamed in 1999 based on its present focus. Adaboy is a unique, new high-impact advertising medium that delivers finely targeted ads within the action of popular online video games and other interactive environments.

Note to editors: Adaboy's logo can be found at www.adaboy.com/news.html; Screen shots of Matrix are also available on the Web site.