Microsoft is taking a big step toward advertising in video games -- a growing area -- with its pending acquisition of Massive, The Wall Street Journal reported today (subscription required).

Citing "people familiar with the situation," the Journal said Microsoft will be announcing the deal, estimated to be worth $200 million to $400 million, next week. A Microsoft spokesman had no comment, per the company's usual policy regarding acquisition rumors.

Massive's Web site, which makes no mention of the Microsoft deal, flashes screen-shots from games such as "SWAT 4" of characters pointing guns next to clearly branded Coke soda fountains or crouched in front of a Sprite vending machine.

The 2-year-old company says its network "brings together publishers, developers, advertisers and gamers, who all benefit from the realism that advertising brings to video games across all platforms." The company goes on to say it can offer developers $1 to $2 profit per unit shipped.