Viacom views online gaming ad bonanza

MTV owner Viacom has acquired online gaming platform Xfire in a deal worth $102m.

Viacom hopes to target the four million players using Xfire's software with ads that fit the demographic of the online gaming community.

Tom Freston, Viacom's president and chief executive, described the deal as " a bull's eye against our young audiences".

"As television advertising loses its effectiveness, advertisers must reach a largely segmented audience with discerning tastes," said a report into games advertising by the Yankee Group. 

"In a highly fragmented media environment, Yankee Group finds that video games present a promising window of opportunity as a growing advertising medium. "

The analyst firm reported that advertising targeted at gamers is about to explode, and predicted that the amount of in-game advertising would increase by more than five times the current market value to reach $732m by 2010.

"Online gaming is an intensely social phenomenon with millions of young adults around the globe interacting constantly, not only to play but to share information and evaluate games," said Judy McGrath, chairman and chief executive at MTV Networks.

Viacom's analysis of Xfire's service found that its one million active users average 91 hours per month, with each individual session usually lasting over three hours.

The Xfire application supports hundreds of the latest PC games and provides social networking, instant messaging and information for online gamers.