Electronic Arts, the world's biggest video games publisher, has struck deals with the two leading in-game advertising companies to stream live ads into its titles.

EA, best known for its leading portfolio of sports titles including the official FIFA World Cup game, has teamed up with with Microsoft-owned Massive and the privately owned IGA Worldwide.

To date, in-game advertising has been a relatively nascent market. In 2004 it was predicted to be worth just $120m globally.

However, as the likes of Xbox and PlayStation have become online-enabled, the millions of gamers in living rooms across the globe - once playing as individuals on separate machines - are now effectively linked in a real-time online world.

This has led some analysts to bullishly predict the medium will be worth $1bn by 2010.

EA said its agreement with Massive, which Microsoft bought earlier this year, will cover up to four video games. The first of those will be Need for Speed: Carbon, the latest of its popular racing series due in late October.

IGA will also deliver advertising in up to three EA games, starting with Battlefield 2142, a futuristic combat game slated for release in mid-October.

Live in-game advertising works in a similar way to how online advertising operates on the internet with banners and buttons.

Advertisers can link ads to spaces in these online games - such as billboards or hoardings in a formula one or golf game - in real-time.

Because the system uses live delivery, with ads updateable and trackable, so elements such as the geographic location of the player, particular audience demographics or time of playing can be catered for.

· To contact the MediaGuardian newsdesk email editor@mediatheguardian.com or phone 020 7239 9857

· If you are writing a comment for publication, please mark clearly "for publication".