Microsoft closing Massive - Report

In May 2006, Microsoft bought Massive, a rising in-game ad company. Unfortunately, three years later, the bloom was off the rose. That's when Microsoft cut 28 percent of the firm's workforce as part of a company-wide staff reduction of 3,000 people.

Now, according to an article in Adweek, Massive is being shut down entirely. Citing unnamed "insiders," the trade magazine reports that the division's general manager, JJ Richards, is seeking employment elsewhere, while the tech and marketing teams of the company are being transferred into other departments within Microsoft.

As of press time, Microsoft reps had not responded to requests for comment. However, if confirmed, the closure would mark a remarkable decline for the business unit, which was reportedly purchased for between $200 million and $400 million. When it was bought, in-game ads were all the rage in the game industry, with then-CEO Mitch Davis predicting a $2 billion market for the spots by 2010.

Adweek blames Massive's closure on two big factors. First is Xbox Live, which Microsoft is favoring because it doesn't have to share ad revenue with third-party publishers as it does with Massive. The second culprit is one of those third-party publishers--Electronic Arts--which decided to take all of its own in-game ads in-house earlier this year, thereby depriving Massive of a large chunk of its business.