Double Fusion will provide the technology for inserting ads into games for Sony’s PlayStation 3. The deal, coupled with its announcement today to do in-game ads for Yahoo Games, is an important victory for Double Fusion and the fledgling in-game ad industry.

Both Sony’s U.S. and European game divisions will use Double Fusion to insert ads into Sony’s games for the PS 3 game console. Beyond supplying the technology to either insert ads into games or add video ads to games at convenient spots, Double Fusion, based in San Francisco, will also help the game publishers find advertisers and work out the brand messages for targeting gamers.

The biq question now is what’s left for Google. A year ago, Google paid $25 million for in-game ad company Adscape. But it hasn’t announced a product or any deals. Microsoft bought in-game ad firm Massive for $200 million to $400 million and Yahoo Games just cut a deal with NeoEdge Networks and Double Fusion. Nintendo has yet to embrace in-game ads.

Landing Sony is a big deal because the electronics giant is launching its Home virtual world for its PlayStation Network this fall. The world, which has the 3-D avatars and scenery that resemble Linden Lab’s Second Life, is a major social network aimed at keeping gamers entertained while they’re not playing games. It will be chock full of in-game (or in-world) ads.

Double Fusion will join IGA Worldwide as a Sony in-game ad partner. IGA has an exclusive deal with Electronic Arts and was the first company picked to do in-game ads for the PS 3.

Sony has sold more than 13 million PS 3s worldwide. The worldwide in-game advertising industry is expected to grow 1,150 percent to $971.3 million between 2006 and 2011, according to the Yankee Group.