Activision and Nielsen Entertainment Announce Pioneering Test to Measure How Consumers Interact With Ads in Video Games Chrysler Group is First Advertiser to Participate; Jeep(R) Integration in

Newest Tony Hawk Video Game to be Tested



Activision and Nielsen Entertainment Release Results of New Study That Further

Establishes the Effectiveness of In-Game Advertising



    SANTA MONICA, Calif., Oct. 18 /PRNewswire-FirstCall/ -- Activision, Inc.
 (Nasdaq:   ATVI) and Nielsen Entertainment today unveiled three new developments
 in their ongoing initiative, first announced in April, to develop standardized
 tools to measure the value of in-game advertising:
 
       * The two companies announced that they are launching a groundbreaking
         test using the newly-released Activision video game, Tony Hawk's
         Underground 2 to determine how long and how often players interact
         with brands.  The test will feature Nielsen's watermarking technology
         that uses audio encoding to uniquely identify when players are exposed
         to product placements within the game.  While the test is initially PC
         only, Activision and Nielsen Entertainment are in discussions with the
         console manufacturers.
 
       * The Chrysler Group will be the first advertiser to take part in the
         test.  Activision and Nielsen Entertainment will measure consumer
         interaction with the Jeep(R) brand, which is integrated within Tony
         Hawk's Underground 2.
 
       * Activision and Nielsen Entertainment presented the results of a major
         new study on the power of in-game advertising (detailed findings
         below).
 
     New Study to Determine Player Interaction with Brands
     Using proprietary methodology, Nielsen Entertainment and Activision will
 conduct a PC-based test to measure in-game product placement among a
 representative sample of active video game households.  The test will
 incorporate a watermark -- an inaudible audio code -- that will identify how
 long and how often players are exposed to various products.
     The test will take place over late 2004 to early 2005, during which
 Nielsen Entertainment will collect and process the data on a daily basis.
 Nielsen Entertainment also will conduct pre- and post-test surveys to
 understand perceptions of in-game advertising, as well as the impact on brand
 awareness and recall.
     Robert Kotick, Chairman and Chief Executive Officer of Activision, said,
 "Companies are beginning to recognize the tremendous potential of in-game
 advertising.  Our partnership with Nielsen Entertainment is aimed at taking
 video games to a new level as a mainstream advertising medium."
     "When our established watermarking technology can be leveraged to advance
 the understanding of a new advertising medium, it's an illustration of the
 value our aggregated Nielsen Entertainment businesses can deliver," said Andy
 Wing, Chief Executive Officer of Nielsen Entertainment.  "I expect the
 Activision/Nielsen Entertainment partnership will be a milestone in media
 history books; the chapter on how video games became a dominant force in our
 culture and a magnet for advertising dollars."
     Michael Dowling, General Manager of Nielsen Interactive Entertainment, a
 division of Nielsen Entertainment, said, "Nielsen Interactive Entertainment is
 extending our leadership in measuring the interests and preferences of global
 consumers.  This test is a milestone in our efforts to create measurement
 tools for advertisers who, increasingly, are interested in video game
 advertising as a means of reaching their target audiences.  As this medium
 becomes ever more popular for the nation's leading advertisers, we are proud
 of our partnership with Activision and are moving closer to providing the
 industry with the standardized metrics to understand the value of in-game
 placement."
 
     Chrysler Group is First Participant
     The Chrysler Group is the first company to participate in the
 Activision/Nielsen Entertainment test.
     The Chrysler Group's Jeep brand is prominently featured in Tony Hawk's
 Underground 2, the newest game in the award-winning Tony Hawk franchise.
 During the test, a watermarking code will be placed around the Jeep brand to
 determine how long, how often and even where in the game users are interacting
 with the vehicles.
     Activision and the Chrysler Group also announced that the Chrysler brand
 will be featured in the life simulation game The Movies, from award-winning
 designer Peter Molyneux's Lionhead Studios, to be released in 2005.
     Jeff Bell, Vice President of Chrysler and Jeep, Chrysler Group, said,
 "Video games are increasingly becoming the medium of choice for a new
 generation of consumers and Chrysler Group has been at the forefront of this
 exciting revolution.  By teaming with Activision and Nielsen Entertainment, we
 are helping to take this medium to its next level."
     Mr. Kotick added, "We are delighted to have a renowned company such as the
 Chrysler Group partner with us on the test, especially because its world-class
 brands can make the game experience even more relevant and more engaging.  As
 a pioneer in in-game advertising placement, we understand that video gamers
 expect to see brands that lend credibility to the content and settings
 portrayed in our games."
 
     Activision and Nielsen Entertainment Release New Data
     Activision and Nielsen Entertainment also announced results of a new study
 that examined the power of incorporating brand name products within the video
 game experience.
     The study, which was conducted among approximately 500 active male gamers
 ages 13 to 34, is an offshoot of an ongoing program of research by the two
 companies to investigate the effects of video gaming on television viewing in
 the homes of young men.  Among the study's key findings:
 
       * Brands with which gamers must actively interact substantially impact
         consumer awareness and recall;
       * These highly integrated ads tend to enhance a gamer's interest in
         purchasing the advertised products;
       * In general, gamers perceive in-game advertising positively and believe
         it makes a game more realistic.
 
     "The industry is starting to benefit from a philosophical shift --
 marketers are more willing to experiment with new ways to reach consumers that
 go beyond the traditional methods.  This study shows how, if products are
 integrated effectively within a game, the impact and recall of that
 advertising is well received," said Michael Dowling.  "As the entertainment
 industry continues to expand and evolve, Nielsen Interactive Entertainment
 will continue to pioneer this research to provide advertisers with the tools
 they need to effectively gauge audience recall and purchasing decisions."
 
     Study Compares Various In-Game Experiences with TV Viewing
     The Activision/Nielsen Entertainment study included participants who were
 randomly assigned to one of four study groups.  Participants in the first
 group experienced a series of both high- and low-integrated ads, while those
 in the second group experienced only two low-integrated ads.  Group three saw
 no in-game advertising at all.  And instead of playing video games, members of
 the fourth group watched an episode of a television show, during which they
 were exposed to traditional advertising.
 
     Effectively Integrated Ads Generate Greater Awareness and Recall
     According to the study's conclusions, the more effectively an ad is
 integrated within a video game, the greater a gamer's ability to recall that
 ad.  In fact, 87% of research participants remembered seeing a high-integrated
 brand much more frequently than other less integrated brands.  This indicates
 that when a brand appears throughout a game, and gamers must interact with it,
 that it has a strong positive impact on brand recognition and recall.
     Moreover, although low-integrated ads did not generate the same degree of
 recall, many gamers still were able to remember such brands by name,
 suggesting that even appearing in background advertising may still impact
 consumer behavior on some level.
 
     Recall of In-Game Ads Can Enhance Purchasing Decisions
     Often, participants who recalled seeing a specific brand advertised
 in-game were much more likely to express an interest in buying the associated
 product than were participants who did not recall seeing the brand.
     In some cases, brands that elicited significant recall in video games
 generated the same, or even higher, purchase interest than those products
 advertised via TV.  These findings suggest that, not only does effectively
 integrated advertising have a significant impact on product awareness and
 recall -- among those who actively remember seeing the brands advertised --
 but it also has the potential to increase interest in buying a product to a
 level comparable to television advertising.
 
     Gamers Generally Perceive In-Game Advertising Positively
     Of the male gamers who participated in the study, about 40 percent said
 that in-game ads made a game more appealing, and made them more inclined to
 buy the advertised product.  Similarly, a solid two-thirds majority of active
 gamers reported that in-game advertising made a game more realistic, while
 nearly three in 10 noted that advertising in video games was more memorable
 than traditional television advertising.
     What is more, more than one-third of participants agreed that in-game ads
 were more effective if they assist a game player in reaching a particular
 objective.  This finding is consistent with the higher awareness, recall and
 purchase interest generated by high-interactive brands.
 
     Study Methodology
     The study was conducted between March 19 and April 4, 2004 with
 approximately 500 active male gamers in Las Vegas, Nevada.  Participants in
 the study were males between the ages of 13-34 who play video games at least
 once a week for at least 15 minutes per session, have familiarity with the
 PlayStation(R) 2 computer entertainment system, and had very limited or no
 experience playing any of the three video games used in the experiment.
 
     About Nielsen Entertainment
     If you believe that entertainment drives culture and culture drives
 consumption, you understand why Nielsen Entertainment is the leading provider
 of entertainment intelligence, serving as strategic partner to top
 entertainment brands throughout the world.  We are comprised of companies
 focused on all media, including filmed, music, literary, interactive and home
 entertainment through the following Nielsen businesses: NRG, EDI,
 Entertainment Marketing Solutions (EMS), SoundScan, Broadcast Data Systems,
 VideoScan, BookScan, BookData, Interactive Entertainment and ReelResearch.
     Together, we provide industry insight and consulting services based on our
 own primary and custom research, strategic analysis, testing, tracking, retail
 sales measurement, and a broad array of specialized tools catering to
 entertainment creators, developers, marketers, distributors and observers.
 Nielsen Entertainment is part of VNU, www.vnu.com, a global leader in
 information services for the media and entertainment industries.
 
     About Activision
     Headquartered in Santa Monica, California, Activision, Inc. is a leading
 worldwide developer, publisher and distributor of interactive entertainment
 and leisure products.  Founded in 1979, Activision posted net revenues of
 $948 million for the fiscal year ended March 31, 2004.
     Activision maintains operations in the U.S., Canada, the United Kingdom,
 France, Germany, Italy, Japan, Australia, Scandinavia and the Netherlands.
 More information about Activision and its products can be found on the
 company's World Wide Web site, which is located at www.activision.com.
 
     The statements made in this press release that are not historical facts
 are "forward-looking statements."  These forward-looking statements are based
 on current expectations and assumptions that are subject to risks and
 uncertainties.  The Company cautions readers of this press release that a
 number of important factors could cause Activision's actual future results to
 differ materially from those expressed in any such forward-looking statements.
 Such factors include, without limitation, product delays, retail acceptance of
 our products, industry competition, rapid changes in technology and industry
 standards, protection of proprietary rights, maintenance of relationships with
 key personnel, vendors and third-party developers, international economic and
 political conditions, integration of recently acquired subsidiaries and
 identification of suitable future acquisition opportunities.  These important
 factors and other factors that potentially could affect the Company's
 financial results are described in our filings with the Securities and
 Exchange Commission, including the Company's most recent Annual report on Form
 10-K and Quarterly Report on Form 10-Q.  Readers of this press release are
 referred to such filings.  The Company may change its intention, belief or
 expectation, at any time and without notice, based upon any changes in such
 factors, in the Company's assumptions or otherwise.  The Company undertakes no
 obligation to release publicly any revisions to any forward-looking statements
 to reflect events or circumstances after the date hereof or to reflect the
 occurrence of unanticipated events.
 
 

SOURCE Activision, Inc.
RELATED LINKS
http://www.activision.com

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