Game advertising as a whole -- such as in-game appearances of a brand or ads that "roll" before or after an online game runs -- is a lucrative business. According to the research firm Parks Associates, the game advertising industry in the U.S. will grow from $370 million in 2006 -- of which advergames represented $120 million -- to $2 billion in 2012. By that year, advergames will be the second-largest stream of revenue in game advertising.

Gaming is a dream medium for marketers. It offers high growth potential without the saturation of TV, print or online banner ads, since monthly ad spending on games is $0.50 per household, compared to $70 for newspaper and $37 for broadcast, Parks Associates reports.

Games created by brands are especially effective because of the psychology of the gamer. If a game is intriguing enough, it can reap the level of branding that mere advertisements can only dream about.

"Certain emotions only occur between people, but games can [generate similar feelings]" -- in ways that mere advertisements cannot," Lazzaro said.

Bella Acharya, group business development manager for branded games in Microsoft's E&D advertising business unit, said, "They're designed around a strategy, rather than something to just wedge in the brand."

Acharya's team works with companies to create branded games for Microsoft's Xbox. That work has turned the console into a major player in the advergame space. In 2004, her group helped to create semi-custom games, such as modifying the casual standard "Bejeweled" with beetles for a "The Mummy Returns" movie tie-in. "We would never do it again," she admits, noting that far more successful games "are one-of-a-kind, built from the ground up."