McDonald's, Intel Entering Virtual World for Ads

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San Jose, California--McDonald's and Intel have signed multimillion-dollar advertising deals to place their burgers, fries and chips within the virtual world of the Sims Online, the highly anticipated Internet sequel to Electronic Arts' social engineering game.

"Product placement is corporations tapping into the borrowed equity of entertainment," said Tera Hanks, a partner in Davie-Brown Entertainment, a marketing firm in Los Angeles. Indeed, product placement is now a $1 billion industry, according to the Entertainment Resources & Marketing Association trade group in Santa Monica, California.

But games have been a laggard. Even though interactive entertainment sales of $9.4 billion approach domestic box office receipts for film, advertisers have been reluctant to associate their brands with the violent fare of bestselling titles like "Grand Theft Auto II."

The fast-food restaurant paid an undisclosed seven-figure amount to allow the avatars who populate the Sims Online to open virtual franchises and earn "Simoleans," the game's currency, by selling burgers and fries to other players. -San Jose Mercury News

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