I think the privacy concern here is a real one. However I don't see the big deal about advertising in games. When I'm playing a game like GTA4 which is supposed to be in NYC, or Rainbow 6 vegas, making a city look real is a major part of those games. Real cities have advertising: billboards, storefronts, posters, whatever. "Fake" adds work great for those, but seeing an add for a company I've heard of certainly doesn't hurt the immersion, it can actually help it. Of course this doesn't apply to the stupid big splash-screen adds or things showing up in blatant, or gameplay changing ways. Those are annoying and need to go. Clearly some games can add this (like those I mentioned above) while others, say Final Fantasy or Mario anything will never lend themselves to this. I think it's a matter of context. Grabbing private information from my computer/console to try and customize these adds is a direction I'm not a huge fan of, but this is very much not isolated to video games. It's all over the web and I'm sure advertisers are trying to do it elsewhere.