So, I'm going to reopen the comment thread from a recent WCG discussion of product placement in games.

The basic question is simple: do in-game products and ads function the same as in the real world?

As I thought about this more, it reminded me of a real world experience. One of my favorite pastimes in Las Vegas is what I call the Highest Order Simulation Tour. During my travels, I try to find the most simulated of the simulacra. I guess there's something wrong with me.

Anyway, one of my favorites are the ads on the sides of the New York, New York Casino. The place is architected to simulate NY buildings, and there are ads on the sides of the "buildings" that comprise the hotel. As I passed by it for the first time, I found myself asking the question, aloud, "Are these real ads, or just representations of ads intended to contribute to the simulation?" I guess they were real ads. I mean, the products and brands were real; I think Panasonic was one. But the point is, when I apprehended the ads, they functioned first to contribute to the simulation of a "real" city. I think this is the equivalent of in-game ads contributing to the realism of the game.

If that's right, then I think it's all but certain that players will apprehend in-game ads as noise, not as ads. What's funny is, these ads may need to include real products and brands to function in that fashion. Zach offered that the "Drink Soda" billboard in XIII may be enough to mimic a branded city. I'm not so sure. I think the lack of branding draws attention to the ad as a not-ad, as an ad that doesn't. I suspect that ads in games may contribute to our perception of realism or comfort in the game, but that the advertisers get no branding value from these ads.

Zach also points out Alyssa Quart's book Branded: The Buying and Selling of Teenagers. Quart's argument is the opposite of mine; she shows the ads in Tony Hawk really do make kids want the products. This may be an open question. I wonder if games that "lay bare" their advertising have a better chance at becoming fungible. I also wonder if this issue has something to do with the player's relation to the in-game character, and thereby how the player apprehends in-game actions and images. In a game like Tony Hawk, there is a very clear player-character identification. Not so in XIII, or GTA, or Zelda.

By the way, I think the highest-order simulation I've found in Vegas is the Coyote Ugly bar, also in the New York, New York casino. It's a simulation of a bar in a movie, that was a simulation of a real bar, in a simulation of the city in which the movie took place and the bar "really" exists.