What began as a small, experimental avenue for advertising as an alternative medium, ads and ad placements in video games are slowly going into mainstream.

With the fusion of games and the Internet, the potential of “reach” makes advertisers’ eyes sparkle. And companies such as Massive Inc. are slowly carving a name for itself by being one of the pioneers of the game ad agency cum broker. Founded in 2003 and purchased by Microsoft last year, Massive has steadily grown into the industry leader in dynamic in-video game advertising, a technology that allows marketers to stream current and constantly updated ads directly into video games played online, either on a console or a PC.

More after the jump

Accroding to reportonbusiness.com; “Placing ads in games is not new but because newer game consoles can connect to the Internet the ads can be updated on the fly, turning what was a niche market into a staple of new ad campaigns. In the past, ads had to be hard-coded into a game, often months in advance. That meant short-term advertisers, like movie studios and television networks looking to promote coming attractions, didn’t see the medium as an option.”

But of course, the ads must be relevant. A Toyota ad is acceptable for a racing game or sports game. But you probably won’t see the same ad in games such as Neverwinter Nights, right?

“It first and foremost has to fit within the context of the game, if it doesn’t, it just sticks out like a sore thumb and the gaming community just rakes you over the coals for being a bunch of idiots,” said Cory Van Arsdale, CEO of Massive. “If you’re enhancing the user’s environment, you’re enhancing the value of the medium in terms of reaching that user.”

Massive is currently working with 50 game titles that will receive dynamic game content with more titles to be added soon.

Expect the number of ads to slowly ballon as you play an online game or plug your console into the web.

What I’d like to hear are your thoughts as a gamer. Will this “invasion” of commerce be good or bad to our hobby?

Sound off below. Thanks.