Advertising in video games is a lucrative playing ground for companies hoping to reach a captive audience who spend hours in front of titles.
By Jo Twist
BBC News Online science and technology staff
After a year of business, one UK company has announced it has reached more than four million people through its strategy of product placement in the booming games marketplace.
Some gamers say ads make games more realistic
In the next 18 months, it expects to reach almost 50 million.
Adverts in games have been happening for some time with the realisation that 18 to 35 year-olds are watching less TV.
A quarter of US gamers have cut the time spent watching TV and a fifth more intended to, according to a recent survey.
The concept is not entirely new, says Susan Kretchmer, academic and president of the not-for-profit organisation Partnership for Progress on the Digital Divide.
First appearing in the late 1980s, when Marlboro banners were displayed in Sega's arcade auto racing games, they have proliferated several genres via cars, billboards, and clothing.
Studies suggest that 30% of in-game adverts are recalled in the short-term and 15% are recalled after five months, a figure unheard of in advertising, she says.
But the deliberate placement of particular products as part of the actual game play is increasingly common.
In Tom Clancy's Splinter Cell Pandora Tomorrow agent Sam Fisher has to work out how to use his Sony Ericsson P900 smartphone to progress.
This kind of strategy is set to grow with better performing next-generation games consoles coming out next year, Hive's Ed Bartlett told BBC News Online.
"Online has taken off in the current generation of consoles. With Xbox and PlayStation network adaptors, online has become a big fighting ground.
"The last 12 months has really seen it balloon. For next generation consoles, it will be even more so."
Once tracking technology is developed, advertisers will have a better idea of how effective it is.
Nielsen Entertainment Media and Activision, as well as Elspa and Screen Digest, are working on developing trackers.
The technology will also track gamers' habits however, which many may not like the sound of.
"I am sure in the next generation there will be systems actually in the software and hardware," explains Mr Bartlett.
"The joy we have with video games is the common hardware - there are usually only two big players.
"The fact you have this hardware and everything is becoming networked we will have more gaming habits tracked automatically."
According to Mr Bartlett, more advertising in games could mean games developers are more likely to risk trying something new.
With the spiralling cost of games in time and money, publishers are staying with tried and tested formulas as well as movie franchises.
"At the moment, people are saying that games are becoming stale," he says.
"Because it is so expensive to develop a game there are lots of issues with publishers unable to fund the game which is why you have seen lots of high profile sequels or film games."
He adds: "If we can actually get more interesting games concepts to the market by bringing in more ads, we see it as beneficial to the gamer."
But coming from a games development background, Mr Bartlett is cautious about how this kind of interactive adverting should be used.
Working with games companies like EA, Atari, Sega Universal, Hive has an input into the product placement in which players interact with them.
"Billboards are great, but you can't interact with them.
"When a character drinks Red Bull in Worms 3D, they get a power up. They are able to jump higher," he explains.
Another game title Hive is working on involves the placement of a GPS product. The system will feature in an upcoming racing game.
The improving quality of hardware and software means hi-res details of logos, buttons and controls can be replicated.
One might think that gamers like to play to escape real world pressure, including the pressure to buy.
But a survey by Nielsen Interactive Entertainment found that 70% of gamers actually liked in-game product placements, saying it made games more realistic.
"In terms of standard product placement in traditional video games, at present, there doesn't seem to be much backlash from gamers," says Ms Kretchmer.
Products integral to the game play are becoming increasingly common
"Game publishers seem to be aware that they need to be careful not to offend or alienate players, especially since they are the ones paying as much as $50 a game."
Mr Bartlett says this is something Hive has worked hard to encourage with their clients. But not all companies may have the same ideas.
"We come from a gaming background so we understand good game play. This is why we put them into the fabric in the game play, giving them tools for the game."
Not only are new consoles with new functionality going to boost this fertile area, but also the changing face of the captive audience.
The average PlayStation 2 player is in their 20s and more than 25% of UK's gamers are women, says industry body Elspa.
Accordingly, advertisers have a far more diverse audience with a lot of spending power to reach.
Clothing brands are increasingly looking to the games industry to place their logos on shirts and jeans worn by skaters and snowboarders in games which attract women players, says Mr Bartlett.
With more gamers going online, the potential is there for ads to constantly update in real-time when ad campaigns change in order to sell ideas.
"Advertisers had to wait a year or more while a video game was developed and their investment was a permanent, one-time buy," explains Ms Kretchmer.
"Now, real-time ad-serving that allows games to show different ads to different people in a time-sensitive manner is becoming available."