According to a report on Reuters, the ads delivered to the network of games are dynamic, and can be tailored by advertisers to target specific groups or areas.
The deal has been signed through Massive, the in-game advertising company bought by Microsoft last year in a $200m deal.
In-game advertising was once a niche area of the industry, but as more and more gaming is conducted while linked up to the internet, and with consoles such as the Nintendo Wii bringing in a more diverse gaming audience, the industry is suddenly becoming more competitive.
Microsoft has made many of the games with online aspects for its latest Xbox console, the Xbox 360. It already has close ties with Electronic Arts, with its corporate vice-president of the interactive entertainment business joining EA, and being replaced by Don Mattrick, formerly the president of EA.
Google has also joined the fray, acquiring in-game advertising company Adscape Media in March.
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