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Microsoft has announced it has signed a deal with PUMA to ensure “prominent PUMA branding” in Forza Motorsport 3.

What seems like a strange partnership actually makes sense – PUMA makes motorsport footwear and accessories as well as sponsoring racing teams from F1 and MotoGP, including Red Bull and Ducati Corse.

The deal includes a number of cross promotional initiatives including exclusive Forza preview nights in selected PUMA Concept stores and regular Forza 3 content for PUMAMotorsport.com. Oh, and there’s the limited edition Forza branded shoe. Which we expect will be popular.

“The Forza Motorsport association is the perfect fit for our brand,” said PUMA’s Antonio Bertone.

“This partnership enables us to capitalize on the energy and excitement that accompanies a huge release such as Forza, and push the PUMA Motorsport brand into a new and exciting arena. We’re delighted to be working with Microsoft on this.”

This is not the first instance of in-game branding – last year’s Mercenaries 2 features real world ads on in-game billboards while, more recently, the PS3 version of Fight Night Round 4 contained prominent ads for the film Bronson.

Below an example how Puma should NOT do ingame advertising…