VIDEO game developer Atomic Planet Entertainment is completing two million-dollar contracts with major software houses, writes Business Editor Julia Breen.

The Middlesbrough group cannot reveal details of the games yet, but one of the contracts is with the world's second largest software games publisher, Take 2.

Atomic Planet director Darren Falcus is visiting the US next week to attend worldwide games conference E3, in the hope of winning more lucrative contracts and showcasing Atomic Planet's current games.

The award-winning games studio is already recruiting to expand its staff of 40 by seven or eight.

Atomic recently completed a Carol Vorderman's sudoku game, which is launched this month by Empire Interactive.

The game is being developed for Sony's PlayStation 2 and PSP by Atomic Planet.

It features live action video of the Countdown hostess, pictured, explaining the history and methods of sudoku, with hints to become a Sudoku master. Mr Falcus said: "It is a real pleasure to work on such a high-profile title with Empire Interactive and Carol Vorderman.

"I have been a big fan of sudoku in newspapers for a long time now, and I am looking forward to being able to play the huge selection of puzzles on my PSP when the game is released."

The PSP version of the game - the first to be released on the handheld format by Atomic Planet - features wireless multiplayer capabilities, allowing users to challenge friends in sudoku-solving races.

Atomic Planet, an independent video game development studio, was set up in August 2000 and has already achieved success through titles such as Jackie Chan Adventures; Mike Tyson's Heavyweight Boxing; DinoIsland; Miami Vice and Super Puzzle Fighter Turbo 2.

The cost of creating video games is expected to reach Hollywood blockbuster proportions soon, with costs expected to rise from £2m to more than £12m.

The sector in the North-East is growing, with companies including Onisoft, in Middlesbrough, Mere Mortals and Pitbull Syndicate, on Tyneside, at the forefront.

Regional development agency One NorthEast set up Codeworks to promote the sector. Codeworks formed design firm alliance GameHorizon, which Atomic Planet belongs to.