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Wednesday, July 25, 2007
Microsoft, EA Sign Game Ad Deal

Microsoft said on Wednesday it will pipe advertisements into a slate of popular sports video games from Electronic Arts Inc. , including its best-selling "Madden" football franchise.

The deal, which also covers EA's "NASCAR," "Tiger Woods" golf, "NHL" hockey and upcoming "Skate" skateboarding games, is a significant win for Microsoft as it tries to build an early lead over rivals such as Google in putting ads into video games.

"The real issue here is that we're making a network play. If I just had 'Madden,' while great, it would be of limited value to advertisers," said Cory Van Arsdale, chief executive of Massive, a game ad company that Microsoft bought last year for $200 million.

The deal comes as Massive faces increased competition from Google, which bought game ad service Adscape for a reported $23 million in March, and from privately held companies such as Double Fusion.

Massive acts as a broker between companies that want to get their ads in front of gamers, and game publishers eager to tap new sources of revenue to offset higher development costs for flashy new titles that can cost $20 million or more to make.

Financial details of the deal were not disclosed.

The deal is also the latest indication of increasingly cozy ties between Microsoft, the world's biggest software company and EA, the No. 1 independent video game publisher.

Last week, Microsoft said its gaming chief, Peter Moore, will leave to become head of EA Sports. Moore's replacement at Microsoft will be Dan Mattrick, a former EA executive who has been a high-level adviser for months.

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