The agency secured the two-year appointment following a three-way pitch against Grand Union and Profero.
LBi will be responsible for developing the digital advertising for the brand across Europe, as well as in English-speaking markets such as Australia and New Zealand.
The agency will also rebuild the SingStar website in time for the launch of a PlayStation 3 version of the game in the summer.
SingStar is one of the more popular games in the PlayStation portfolio.The karaoke-style game, where players sing and have their vocal skills analysed in the game, was originally developed in 2004 and has spawned a number of spin-offs, including SingStar Rocks! and SingStar Pop Hits.
LBi has previously worked with Sony on the launch campaign for the PlayStation 3. The agency was responsible for the pan-European creative and built the thisisliving.tv website, which featured heavily in TBWA\London's integrated campaign.
Sony Europe recently appointed Dare as its digital agency to handle online marketing for products including Bravia, Walkman and Vaio.
Sony also works with digital agency Tonic, which handles projects such as the "release your music" campaign, which promoted new products such as the Sony Video Walkman.