Google is in talks to acquire in-game advertising firm AdScape Media.
Google's potential move into the video game ad market comes at a time when they're already exploring new markets with radio and perhaps television.
Last year Microsoft purchased in-game advertising firm Massive for about $200 million. Microsoft's internal estimates place the in-game ad market at about $1 billion by 2010. The CEO of Massive said last year the figure was more like $1.6 billion. The Yankee Group thinks it's more like $732 million by 2010.
I've owned quite a few video game consoles, and advertising on them has always been obnoxious. In Madden 2007 for the PS2, for example, the player of the game is always sponsored by Snickers. However, given that in-game ads are probably inevitable, I would like it better if the sponsors and ads changed every day/week/gaming situation. As long as they don't disrupt the flow of the game, I'm down.