Product placement is big business in the movie industry, but it looks like it could be just as lucrative for games developers if a deal between MacDonalds and Intel and games maker Electronic Arts is anything to go by.

According to the New York Times EA plans to announce contracts worth $2m with the fast food chain and chipmaker to include their products in the upcoming Sims Online game.

Sims Online, which is due out in the USA this autumn, is the latest in the hugely successful Sims series of titles, which have sold some 17m copies worldwide. According to the terms of the contracts, the game will see virtual characters in the game munching on Big Mac burgers and communicating using computers emblazoned with the Intel logo.

Sims players have already been able to download branded products into the game, such as a Pepsi dispenser, but up until now they have not been an integral part of the Sims world. But it should come as no surprise that advertisers have recognised the popularity of computer games and hence their potential to promote products in the same way as popular films can.

Intel's Ann Lewnes told the New York Times: "This is the next frontier of product placement. It's very engaging. You're not just watching products, you're actually using them".

The Sims Online is not the only game to cash in on product placements, Activision also plans to include a Nokia headset in its upcoming Pro Surfer title, and its Street Hoops game signs advertising the Sprite soft drink will appear. Vivendi Universal Games also has a sponsorship deal tied up with Bawls, a caffeine-saturated soft drink that will fortify the characters in the game, while in real life the game will be advertised on cases of the drink.