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The gaming industry is looking more like the movie industry all the time. Development costs are skyrocketing, and the industry is facing the bottom-line pressures that come with a "hits-" based business. And as developers and publishers struggle to minimize costs and maximize revenue - like Hollywood - the specter of product placement is beginning to surface on the small screen.

Product placement is a lucrative source of pre-release revenue in the movies, a fact that didn't escape notice in boardrooms at Sony Computer Entertainment and other publishers. Jet Moto, one of last Fall's PlayStation titles, was awash in corporate logos, most notably those of Butterfinger and Mountain Dew.

"There's a ton of it, isn't there?" said Sony's Kevin Horn of Jet Moto's in-game advertising. According to Horn, the logos appeared in the game at the request of the game's producer, who wanted the look and feel of a real motocross race. Early versions of the game were missing the logos, so the producer opted to "populate the game with virtual billboards." Horn said he didn't think that any revenue ever changed hands in the deal, though he admitted that "there's always a possibility" of future relationships with the snack and soda set.

Another PlayStation and PC racing title, WipeOut XL, features such a "contextual" product placement for Red Bull, a UK sports drink. The game was organized around the British techno club scene, including techno club music and rave-style graphics by Sheffield's Designers Republic. "Red Bull is very much a part of that club scene," said Mark Day of Psygnosis, who admitted that the drink company paid a "small promotional consideration" for their part in the game. According to a Usenet posting, the game's manual says that Red Bull did not sponsor the game.

"We do if we feel it is appropriate to the product," said Day. "Once it becomes intrusive, there is a consumer backlash." Psygnosis faced some discussion on Usenet, but nothing resembling a backlash.

So far, most experiments in product placement have occurred in the younger console market, possibly because publishers may find the older PC-gaming market more skeptical. While billboards are not out of place in racing games such as VMX Racing, there is clearly a slippery slope, and through trial and error, publishers will inevitably find out where the cliff lies.

"If you had a racing car covered in Twinkie adverts, it would ruin the illusion that you are in a racecar," said Day.