Microsoft is shutting down its in-game advertising unit Massive, according to sources close to the company.
According to insiders familiar with the closure speaking with Media Week, the ad division is to be shut down before the end of this month and Massive general manager JJ Richards has been looking for another job. Other employees are being assigned to other projects and areas of the company.
Microsoft acquired Massive in 2006 for between $200-$400 million in order to take advantage of dynamic in-game advertising while it was popular. The firm's former CEO has estimated in-game ads would become a $2 billion business by 2010, which the market has not even come to now that the year of prediction is almost over with.
Massive's client list during the MS acquisition included Activision and EA, but earlier this year, EA pulled in-game ad business from Massive and started doing it in-house; thus causing a chunk of revenue for the ad firm to be lost.
The company was never fully integrated with the Xbox Live marketing team, with quite a few Xbox executives against the deal from the start.
Source told Media Week that MS has approached with rival in-game ad agencies about the possibility of buying Massive off its hands for around six or seven figures.
Thanks, All Things Digital.