The tiptoe between too little and too much is difficult. Results vary from site to site. Finding that point of "what's right" is the Holy Grail of advertising and I doubt there's a hard and fast rule answer... else we'd all be using that... and these kind of questions would not occur.

sounds like you need to do some testing.
try the page for a few days with/without or changing placement and pre/post launch and check your analytics (bounce rate, time on page, etc)
you might also want to look at screen size for your visitors.
i imagine most gamers use a high resolution but stealing 390 pixels from a laptop display with a couple of toolbars installed leaves a lot of content below the fold.
it might also affect usability if they have to go "half a page" down to play the game.

I run a niche directory that was without any advertising for the first year. Only then I added a little amazon shop (at that time quite profitable) that provided articles needed by my target group. I made it not too obvious and the little ads I placed around my original pages were well received. Later I added an other affiliate program that was also in demand of my niche.
Tests with adsense or banner-ads were not successful, probably because the visitors already found what they were looking for on my site and there was no need to click to any external place.
This could be the same with your audience.

That's not what I was asking though.

I was asking whether or not the presence of advertising on a website negatively affects a first-time user's perception of that site.

I suppose this varies wildly from one demographic to the next. My demographic is an incredibly picky tech/web savvy variant of the young male population (14-30). I KNOW what they expect of a website in terms of design, content, and layout, but I don't know how they respond to the presence of advertising.

I guess my question is similar to this thread though:
[webmasterworld.com...]

The difference is, my website is more of a resource/community "fun" site than anything else. It's very similar to this website, except that it's geared towards gamers.

The ads on this site are very minimal, and Im wondering if that has a POSITIVE effect on the credibility of this site (again, think of first time visitors)

I can only speak for myself... If I see much more than a couple vertical blocks off to the side, or a couple horizontal blocks per page, it starts getting cheesy looking to me. If I already know the site and know there's something there I want, I would probably put up with more. But if I went there for the first time and saw more than that, I'd probably move on. I respect a quality looking site. I personally only have two basic ad blocks per page, one vertical, one horizontal, and neither are very big. I understand people need to do advertising, but there's a line you cross when it's obvious people are just being greedy, and that's when it's a turnoff. For me the content needs to fully dominate. Anything less than that... like I'm sitting there trying to figure out what's the content and what's the ads... and I'm gone. But it's hard to say what's right without really knowing someone's biz plan and how they want to make money. I think you can go the big ads way, but if that's not your main thing, you could potentially go the super quality way and really make it a showpiece with no ads at all. I think most people really respect that. Whether you can do that and still make money though is only something you know. So basically... I don't see how NOT having ads could be anything but good.

These days I expect to see advertising but I also expect to go straight to content. Anything that creates a block between me and the content is a serious turn off.

My demographic is an incredibly picky tech/web savvy variant of the young male population (14-30). I KNOW what they expect of a website in terms of design, content, and layout, but I don't know how they respond to the presence of advertising.

Sorry we couldn't be of help - one last try:
ASK your audience :)

Quantity and placement of ads is crucial. It does affect user perception. Is your site there to provide real information or just to push advertising? Many users will ask themselves that question.

Sites with a lot of ads, or pages which are all/mostly advertising above the fold, or which have so much advertising per page that even small articles are split into multiple pages do annoy users.

I, for one, will try to visit a different site to get information, only visiting the ad-plastered site again under sufferance.

Testing the changes and then decide why way is good!