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Microsoft said to be closing Massive unit

A report says Microsoft is closing down its in-game advertising unit Massive--a company it is said to have paid several hundred million dollars for just a few years ago.

In-game ad
A Massive in-game advertisement, as seen in Tom Clancy's Rainbow Six 2. CBS Interactive/Massive

Microsoft is said to be preparing to shut down Massive, the in-game advertising unit it scooped up in a pricey acquisition back in 2006.

According to Mediaweek, Microsoft has been trying to jettison the unit for months now and will simply shut it down sometime this month. The report also says a number of Massive's employees (which once stood at 80) are now being absorbed into other parts of company, short of Massive's general manager, JJ Richards, who has reportedly been seeking employment elsewhere.

Massive worked with developers and publishers to build advertising spaces into titles, then sell ad spots within its network that could be targeted to specific demographics. These ads could also change long after a title had come out, adding some potential longevity to titles resold on the used-game market--an area where publishers are still experimenting with ways to make additional revenue.

One of those companies is Electronic Arts, which Mediaweek points out as drawing some of the advertising interest away from third-party offerings like Massive, when it began its own in-game ad unit. Previously, the developer and publisher had been buying ad work from Massive along with IGA Worldwide. The first title to make use of EA's own group was Madden NFL 11, which was released earlier this year.

Mediaweek also looks to Microsoft's own Xbox Live platform as stealing some of Massive's thunder. Microsoft has its own advertising unit that sells ad spots on the Xbox 360's dashboard. These have become increasingly interactive and prevalent, as Microsoft has continued to update the Xbox's system software.

Microsoft acquired Massive in 2006 for an undisclosed sum, though an estimate by The Wall Street Journal (subscription required) had the deal costing Microsoft somewhere between $200 million and $400 million.

A Microsoft representative had no comment to CNET on the Mediaweek report.

Late last year, Microsoft sold off Razorfish, the online-advertising firm it acquired as part of its $6 billion Aquantive purchase in 2007.

CNET's Ina Fried contributed to this report.