Sightings of "Obama for President" billboard ads in the Xbox 360 game first surfaced last week and were initially thought to be spoofs, but the campaign has been confirmed to be true by game publisher Electronic Arts.
The ad inside the hugely popular 'Burnout' on the Xbox 360 Live network is the most high profile use of in-game advertising by a presidential candidate and carries the line "Paid for by Obama for President".
Ads in 'Burnout' have been taken out for both Barack Obama and the website VoteForChange.com. While the ads do not explicitly say "get off of the couch", they do advise gamers to "vote early".
Holly Rockwood, director of corporate communications at Electronic Arts, said: "I can confirm that the Obama campaign has paid for in-game advertising in Burnout.
"Like most television, radio and print outlets, we accept advertising from credible political candidates. Like political spots on the television networks, these ads do not reflect the political policies of EA or the opinions of its development teams."
It is estimated that as many as one third of American households own an Xbox 360, Sony Playstation 3 or Nintendo Wii, and in-game advertising is increasingly seen as effective.
For the Obama campaign, which leads Republican rival John McCain by ten points in the polls, the use of the in-game ads has generated considerable buzz in the blogosphere and within gaming circles and adds to the wide use of online and social media that the Obama team has turned to during the Democratic candidates campaign including blogging, YouTube, Facebook and MySpace.
The use of the ads supports the view that in-game advertising can be highly effective. A recent study by Microsoft's Massive Inc showed that the gaming audience has a consistently positive opinion of the ads and how they affect their game experience.
The study looked at the impact major brands had on gamers. It found that an Adidas campaign, in 2K Sports 'Major League Baseball', achieved 40% recall of the brand's "Impossible Is Nothing" tagline -- an increase of 90% over those not exposed to the ads.
Brian Mathena, group media director for Carat, said: "The influence of gaming on our target market for Adidas can't be denied."
Across all game genres and advertisers studied, the research revealed that an average of 70% of gamers agreed that dynamic in-game ads "contributed to realism" and "fitted the games" in which they were served and looked "cool."
Cory Van Arsdale, CEO of Massive, said: "As the in-game medium matures and establishes its position on the media plan, advertisers and agencies are eager for insight into creative nuances and best practices for maximising its impact. We view this type of guidance as an essential part of our role as an industry leader and innovator."
Justin Townsend, CEO at in game ad firm IGA Worldwide says the move by Obama campaign is an extremely savvy one.
"The introduction of a dynamic political in-game advertising campaign to address the 18-34 year old demographic speaks volumes of the growing importance and influence of in-game advertising. This is a prime example of a visionary advertiser wanting to impact and influence a highly engaged audience and, once again, reinforces our research proving in-game ad's effectiveness.
"Political candidates have access to every single advertising medium available and their turning to in-game advertising further strengthens the fact that in-game ads offer an unparalleled ability to run tactical campaigns, with little turnaround time, that reach and hugely influence a very specific, coveted and vocal demographic."
Republican candidate John McCain has not used in-game ads, but his team did create a Facebook game based around an old arcade classic called 'Pork Invaders'.