The games publisher, which has seen its shares treble in price since October, said Bowie would appear as a character in a futuristic 3D adventure called Omikron: The Nomad Soul.
Bowie and his guitarist, Reeves Gabrels, will compose eight original songs and will be "filmed" to appear, performing with their band, in some of the game's 400 scenes. Bowie's wThe game will also allow players to "buy" a virtual album of the songs within the game.
The news was one of four upbeat announcements which boosted Eidos shares yesterday. The group signed a deal to publish the Resident Evil trilogy of horror games brought out by Capcom of Japan.
It also said it will publish games developed by Timeline, the US studio founded by Michael Crichton, writer of Jurassic Park and ER, the TV hospital drama. The group has also extended its licensing agreement with Looking Glass Studios of the US to publish four of the Thief series of games.
The news coincided withan anoouncement by British Telecommunications that it had been picked by Sega Enterprises to provide an Internet link for Sega's new entertainment system, Dreamcast. To be launched in September, Dreamcast represents Sega's bid to recapture its old share of the computer games market.