Microsoft said to be buying Massive

Microsoft is said to be planning to buy in-game advertising heavyweight Massive in a deal worth $200 million to $400 million, the Wall Street Journal is reporting.

According to the Journal (paid subscription required), Microsoft expects to acquire the 80-person New York City outfit in a bid to bring the technology behind much of the ads found in video games today in-house.

Massive, which along with Israel's DoubleFusion, dominate the in-game ads market. Together, the companies are pioneering the art of placing dynamic and ever-changing ads in any number of places in games, including billboards, on cars, on vending machines and more.

But by buying Massive, Microsoft is putting itself in a position to cash in both from the sale of games, and from the revenue generated by the inserted ads. This will also allow Microsoft to maintain more control over how the ads are placed and to consider new business models in which it could potentially allow the ads to subsidize lower prices on its game titles.

Microsoft's planned deal follows recent deals in which News Corp. paid a reported $650 million for game enthusiast site IGN Entertainment and in which Viacom put down $102 million for in-game instant message pioneer Xfire.