Revenue in video game advertising will almost double in the next four years, becoming a £1bn business by 2011, according to a new report.

eMarketer forecasts the worldwide business will balloon from its 2007 value of £500m as game developers look for new ways to monetise increasingly expensive game production processes.

But ‘advergames’, playthings designed as marketing devices, will make up a third of all US game ad revenue.

Said report author Paul Verna:

“As the in-game advertising industry evolves, game developers, console manufacturers, advertisers and technology providers are experimenting with new approaches that leverage the shifting demographics of the gaming population.”

In recent months, Google has acquired San Francisco-based in-game ad platform provider AdSpace and Microsoft acquired rival Massive, as the search marketing giants set their sights on the game world.

eMarketer forecast the business will grow worldwide by 23% annually up to 2011.