Video game advertising is projected to more than quadruple to $800 million in 2009, from $120 million last year as the popularity of video games soars.

The growth is largely fueled by the success of sequels and games based on Hollywood films, and handheld, online and wireless games. Worldwide video game sales rose by 11.1% to $25 billion in 2004, according to the recent report “Global Entertainment and Media Outlook” by PriceWaterhouseCoopers. By 2009, the video game industry worldwide is projected to grow to $55 billion.

But finding the right brand-to-game match is crucial. Pairing with E (Everyone) and T (Teen)-rated games is a hot ticket, but M-rated, (Mature) games may be less broadly appealing.

“M-rated games do present a potential problem depending upon the advertiser’s or the brand’s goals,” says Jay Cohen, VP-publishing, Ubisoft. “On the one hand, [brands] want to reach the male 18-34 audience. But they may say, ‘I don’t want my brand to be associated with violence.

For San Francisco-based Ubisoft’s March release of M-rated Splinter Cell: Chaos Theory, the company signed major brands, including Cingular Wireless, Axe and Nokia in product placement deals.

“You start limiting your audience,” Cohen adds. “It’s like an R-rated movie. M is not for everyone. You have to make a decision where you want to target [the brand].”

With Splinter Cell, Cingular Wireless took product placement beyond its logo with a call-to-action using shortcodes entered via handsets. Gamers then download a link to play a mobile version of the game via text messaging.

“For advertising to be effective in today’s media landscape, it’s essential to integrate our messages beyond traditional media channels,” says Millar Freeman, senior manager youth marketing for Cingular Wireless. “Advergaming allows us to get our messages in front of millions of current and potential youth customers in a fun and engaging format. The challenge will be to make sure that our advergaming engages and even improves on the game. That’s possible through smart and focused in-game integrations.”

Whether it’s an M-rated or an E-rated game, most players enjoy seeing familiar brands during the game experience. Forty-three percent of gamers say they like it when video games display real products, Cohen told attendees in September at The L.A. Office Roadshow Gaming Boot Camp in Hollywood, an annual conference for TV, music and film marketing opportunities. Another 55% think games are more genuine when real products are integrated into the gaming experience. And unlike TV or movies, the placement remains every time players turn on their game, Cohen adds.

“Recall is extremely high,” Cohen said at the conference. “[Players] want to see Burger King. They don’t want to see ‘Acme.’ It doesn’t make sense.”

The average age of a gamer today is 30 years, according to research by the Entertainment Software Association. More than half of game players (62%) are over 18. Of all game players, 43% are women.

At the Gaming Boot Camp, publishers showed off upcoming releases (see sidebar below) and blatantly search for brand partners.

Midway Games is searching for beverage, confection, snack foods and sporting goods brands for product placements deals in Over the Hedge, an E 10-rated game based on the upcoming DreamWorks Animation film. Vivendi Universal Games is seeking apparel, beverages, QSRs, and consumer electronic brands to sign on to the latest Leisure Suit Larry release, an M-rated game about a middle age man looking to score.

“That engagement with the actual product makes it very unique,” says Mike Quigley, group VP-marketing for EA. “For brands…It just means a richer experience and interaction.”

In EA’s popular The Sims game, players can download a McDonald’s stand and interact with the product. Likewise, gamers see the Cingular Wireless icon throughout EA’s racing title Need For Speed Underground 2.

“The most important thing we need to be careful with is [showcasing brands] in a tasteful manner and not over-saturating the product,” Cohen says. “We have to carefully balance that we are game-makers. At the end of the day…games need to be fun.”

GAMING HAVEN Buzz builds for upcoming releases

ACTIVISION

Call of Duty 3 (2006) The chaos of battle returns as ordinary soldiers fight as a squad through epic moments of World War II. Anticipated rating: T.

EA

Need for Speed: Most Wanted (November 2005) The thrills of racing return in this new release, which features fast and tricked-out supercars. Anticipated rating: E

MIDWAY

Vegas (2007) The rags to riches story takes players from their first step on the Vegas strip to entrepreneurship. Build a casino empire or live the famous lifestyle of music mogul. Anticipated rating: M

THQ

Company of Heroes (TBD) In this World War II genre game, players lead squads of Allied troops into battle against the German war machine. Anticipated rating: M

UBISOFT

Open Season (Fall 2006) The first game in a multi-title licensing agreement with Sony Pictures Animation. The game follows the adventures of a domesticated grizzle bear and a one-horned mule deer stranded in the woods during hunting seas. Anticipated rating: unavailable

Surf’s Up (Summer 2007) In its second game with Sony Pictures Animation, Surf’s Up is a “mockumentary” based on the revelation that surfing was actually invented by penguins. Anticipated rating: TBD.

VIVENDI UNIVERSAL GAMES

Spyro The Dragon (Q4 2006) Spyro may look like a small and friendly dragon, but he packs a big punch with his magical abilities, power breath attacks ands acrobatic combat moves. Anticipated rating: E10

Crash Bandicoot (Q4 2006) Chase a mad scientist, wumpa fruit and a wacky orange marsupial through this game. The 2007 title will be the game maker’s first foray into next-generation technology. Anticipated rating: E10

NEW OPPS

Film

Eragon

Twentieth Century Fox, Summer 2006

When Eragon finds a polished blue stone in the forest that brings a dragon hatchling, he learns he has stumbled upon the legacy of the Dragon Riders. Overnight, Eragon is thrust into a dangerous new world. Based on the best selling novel.

Home Entertainment

Monster House

Sony Pictures Home Ent., Q4 2006

Twelve-year-old D.J. Walters is convinced his crabby neighbor Horace Nebbercracker, who terrorizes all the neighborhood kids, is responsible for his wife’s disappearance. Any toy that touches Nebbercracker’s property, disappears. But D. J. is not imagining things, and the situation is about to get worse.

The Little Mermaid: 2-Disc Special Edition

Buena Vista Home Entertainment, Q3 2006

During a raging storm, Ariel, the fun-loving mermaidshe swims to the sea surface and rescues the prince of her dreams. Determined to be human, Ariel strikes a deal with the devious seawitch, Ursula, trading her fins and voice for legs. Aided by her friends, Ariel must win the prince’s love and save her father’s kingdom.

TV

Nightmares and Dreamscapes

TNT, June 2006

This limited series is based on Stephen King’s 1993 anthology of 20 short stories. Subjects include: murderous revenge, dead rock stars, zombies, an evil toy and a wicked stepfather.

The London DM Fair is going global.

The event-scheduled for March 16-18-has been rechristened the International Direct Marketing Fair. Twelve thousand visitors from 40 countries attended last year’s fair, which included the debut of the U.S. Pavilion, a showcase for American exhibitors.

A “Software Showcase,” where visitors can sample the latest DM applications, is a new feature of this year’s show at Wembley Conference and Exhibition Center in London.

The fair, sponsored by Reed Exhibitions, also recently redesigned its Web site (www.directmarketingfair. com).

The site offers information on educational seminars and exhibitors, as well as interviews with direct marketers hosted by “Little Malcolm,” a cartoon version of exhibition director Malcolm Whitmarsh.