Microsoft's wholly owned subsidiary Massive Inc. announced this week it has reached an agreement with EA Sports to place in-game advertising in upcoming titles that include Madden NFL 08 and Tiger Woods 08 (Xbox 360, PC), NASCAR 08, NHL 08, and Skate for the Xbox 360.

Not to be overlooked is the online component of these games, as Massive ad sales are dynamic, meaning that spots are sold on an on-going basis and the advertisement is updated through an Internet connection. Although sports games should do just fine with ads shown around the environment (in fact it could make them look more realistic), there is already some controversy and criticism on how gameplay can be affected in order to make ads more relevant.

But there will also be challenges ahead. As the Utility Belt noted yesterday, a recent study shows that gamers are more likely to notice ads that are close to the action – and that could put pressure on game makers to sacrifice the purity of game play to make an extra buck from advertising.
For quite some time analysts have been predicting the rise of in-game advertising as an additional source of funds given the increasing cost of game development. So far only a small number of popular titles have included ad placements, but if recent investment on this industry should be of any indication, we are on the way of seeing much more ads on games in the coming years.