Adweek reports that inside sources at Microsoft have confirmed that Massive Inc., a Microsoft-owned advertising firm with a focus on in-game marketing, will be shut down by its parent company before the end of the month. The reasons for Massive's waning business are apparently twofold: Apparently, Microsoft favors advertising directly on the Xbox Live dashboard, as the company keeps all of the ad revenue, while Massive must split its revenue with publishers. In addition, sources told Adweek that EA's recent decision to keep in-game ads in-house stripped Massive of some of its largest clients.
The price at which Microsoft purchased Massive Inc. in 2006 is estimated to be between $200 million and $400 million, both of which are a great deal of money. The firm faced its fair share of hardships last year, when its parent company laid off more than one quarter of its staff. We've contacted Microsoft for a comment on the report.
Update: A Microsoft spokesperson responded to our query with a boilerplate "Microsoft does not comment on rumors or speculation."