Ars Technica reports on a fascinating Subway ad campaign that took place inside the popular online game Counter-Strike. Apparently the ads for a $2.49 sandwich were injected into the game world with a special bit of ‘mod’ software distributed by an ad agency to certain operators of the server computers on which games of Counter-Strike are hosted. The ad agency paid the server operators to run the mod to give ad impressions in game.

Now advertisements in games are far from new. What is interesting is that a third-party company, entirely unrelated from Valve (the producers of Counter-Strike), has found a way to make money from the millions of people who play the game without dealing with Valve directly. Valve has implied that this violates the terms of their End-User License Agreement (EULA), which means there is likely going to be a lawsuit about the whole mess shortly.

But ignoring the EULA restrictions, we think it’s sort of brilliant. By dint of overwhelming success, Valve has created an alternate media channel all of its own—one filled with the coveted ‘young male’ demographic. But since Valve chooses to offload the cost of hosting games of Counter-Strike to fans instead of hosting all the servers on their own, they’ve made it technically impossible to prevent others from piggy-backing on their success.

In fact, since the Counter-Strike server operators have to pay all their own bandwidth fees to operate servers that generate money for Valve by way of more games sold, we think the Subway ad campaign is a pretty healthy way for server operators to recoup some of their hearty expenses. (Again, EULA violations aside.)

We’re as surprised as you, but we think we’re siding with the ad agency and the server operators on this one. Why should server operators have to pay the operating expenses for an online game without being able to generate their own revenue if they choose?

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