THQ, a large game publisher, has announced  it would begin using ads delivered over the Internet by Massive Inc. in its games . THQ is one of the largest publishers to agree to these dynamic ads, and this is a big step toward a brave new world. The growth in Internet advertising is well documented, and now gaming ads could see similar growth. As people spend less time with passive television and more with the interactive media of the Internet and gaming, marketers will need to move as well.
With the next generation of gaming represented by the Xbox 360 and PlayStation 3, games will approach photo-realism. Advertising  in such realistic environments will be more profound then many realize. Players are able to interact and affect the world within the game, and the experience with products (via product placement) and advertising (via in-game billboards and television commercials) is more direct. Maybe your character has to drink a can of Coke to keep up his stamina? Maybe there is a scene where the player has to watch a newscast, with a 15 second Best Buy commercial before it?
Many games already feature forms of marketing: Stadiums in sports games feature billboards, racing games include product placement via the choice of cars, and sand-box style games with worlds to explore(Grand Theft Auto or Tony Hawk) have advertising of every kind. This will only increase and the addition of a dynamic model will make it more attractive to the advertising industry. Let's just hope it is not to the detriment of the gameplay--else advertisers may find a backlash toward their company and products.