In case you hadn't noticed, advertising has made its way into the world of video games. Maybe you’ve seen those ads surrounding your favorite online poker game and didn't think much about it. Or you've noticed a billboard advertising your favorite soft drink when playing a game on your Xbox. Suddenly you realize the game world is becoming much more real. And, in keeping with our daily reality, this virtual world is marketing to you just as the real world does. Is it effective? Probably. Is it the way of the future? Definitely. More and more companies are testing the waters with a method of reaching potential customers called advergaming.

In this article, we'll find out what advergaming is, how it began and why companies are turning to advergaming to advertise their products and services.

Thank You Thanks to Alex Obringer and Jack Obringer for their assistance with this article.

Advergaming is an immersive mix of advertising and entertainment that takes the form of video games. According to eMarketer.com, it's been around since at least the early 1980s when Kool-Aid and Pepsi developed Atari 2600 games that featured their products and distributed the game cartridges as promotions. American Home Foods also had a video game that promoted Chef Boyardee that it distributed on floppy disk. Since then many other companies have developed games that are centered on their products or even their promotional characters. General Mills' Trix Rabbit was part of a game where he and his friends played baseball against major league players. This game, as well as another game called "Chex Quest" (released in 1996) that centered on Chex cereals, was distributed via cereal boxes -- certainly a leap from the traditional toy prize.

Photo courtesy of PrimaryGames.com ©2000-2007 The SweetTarts game has actual candies as part of the game, as well as their logo on the screen at all times.  See more advergaming pictures.

In 1998, NVision Design (now Blockdot) needed to build company recognition, so they created a game they called "Good Willie Hunting," a parody of Whack-a-Mole that made fun of President Clinton's extramarital escapades. The game was a huge success and brought more attention to this new promotional method.

In 2001, the term "advergames" was coined in Wired magazine's "Jargon Watch" column. Since then it has been used to describe the free online games that many major companies are now using to promote their products.