The Sun, the pizza delivery chain Domino's Pizza and the Leaf UK brand Fizzy Chewits are the latest companies to target young consumers this way. This month they launch a new game, Snapperazzi, featuring the adventures of a paparazzo photographer from the Planet Dirt who must take 'big-money' pictures on the Planet of the Page Three girls Planet Mental and Planet Royal.
The game was devised by the Sun newspaper, with Domino's and Chewits as sponsors, and all three feature graphically in the action through a deal co-ordinated by specialist software promotions agency Microtime Media.
'The aim is to target a youth audience that is increasingly difficult to reach through television,' said Microtime's managing director, Daniel Bobroff. His company has so far developed 18 games featuring sponsors' brands in either the landscapes or signage of computer and video games.
In August, Walkers Smith launched One Step Beyond, its second game featuring Colin Curly, brand spokesman for Quavers. The first game, launched last year, achieved a 30 per cent reach among targeted five to 14-year-olds, which is higher than the average for a Saturday morning network TV show.
Such sponsorship, or product placement, is effective for a number of reasons, Bobroff believes. 'This is a medium that merges the message with the medium by default.' Players pay close attention to the action so branding does not have to be heavy to strike home, he said.
Association with a high- quality game can enhance a brand's image among youngsters. And it also has a tangible benefit for consumers - reducing the game's retail price, Bobroff says.
Research conducted earlier this year by Carrick James Market Research showed that eight million five to 19-year olds have a console or PC at home and 87 per cent play regularly.
Ian Zak, joint managing director of sales promotion consultancy Business Development Partnership, believes computer games offer significant potential. 'This is a very exciting area no one can afford to ignore. It merges all media - books, film and TV,' he said. 'It builds a relationship with the target audience in much the same way that Sonic and Super Mario do - it speaks the kids' language.'
However, there is more to it than putting a brand into any old game. 'Game play is critical,' Mr Zak said. 'There is no point in featuring a brand or product unless it integrates with the game.' And there is no point selecting a game unless it offers the player value for money: it must be challenging.
Such lessons were learned the hard way in the United States, where early sponsored games featuring Spot, the characters in 7 Up's advertising, and The Noid, a character licensed by Domino's Pizza, failed to impress. Since then these games have grown in sophistication; children want to play them, Mr Zak stresses.
However, not everyone shares his enthusiasm. Prompted by growing concern that parents buying the games are unaware of their sponsored content, consumer groups are pushing for a code of practice.
Sponsorship and product placement fall between two regulatory stools; neither is covered by the British Code of Advertising Practice covering print media or the equivalent broadcast codes.
This month, Advertising Association director general Andrew Brown launches Project 2000, a six-month study of the implications for advertising from new technology. The investigation will cover interactive television and direct-response TV as well as computer and video games.
'While it seems a perfectly legitimate form of behaviour, people need to know what is going on,' Mr Brown said.
At the Advertising Standards Authority, spokeswoman Caroline Crawford said product placement in computer games is being closely monitored. Whether Project 2000 will eventually lead to an extension of existing advertising guidelines remains in doubt.
'It really depends on whether the association (between sponsor and game) is clearly marked on the outside of the product,' she said. 'Purchasers should be able to see clearly that the product is sponsored to help them decide whether or not to buy it for their children.'
Meanwhile, Mr Bobroff believes that within a matter of years software sponsorship and product placement will no longer be an activity purely for brands targeting children.
'By the end of this decade, interactive media will be an everyday part of any marketing strategy,' he said. Already, his company has linked Penguin Biscuits on screen with educational software now being used by five to 12-year-olds in schools. And he points to the great marketing potential of business and information software systems.
The younger generation is leading the way from passive to active - indeed interactive - forms of entertainment and information-gathering. Only now are advertisers, and legislators, realising they cannot afford to stay one step behind.