Virginie Chesnais serves as chief marketing officer at the ad‑technology analytics firm Happydemics. For many years, gamers have viewed in‑game advertising with suspicion, and the wariness is understandable.
The reputation of ads in video games is mixed: they often redirect users to unrelated websites or apps, present misleading content, or feature hard‑to‑find close buttons, all of which generate frustration. A recent study by eMarketer highlighted that 52 % of players would stop a session if they encountered several disruptive ad elements.
Losing half of your audience at the moment you’re trying to engage them is hardly an effective approach. Nevertheless, advertisements do not have to be a negative experience. The same research revealed that one in five gamers would actually increase the frequency with which they play a title if the in‑game ads were of high quality and relevance.
With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming continuing to climb, well‑crafted ads could find a welcoming niche within the medium. The argument for integrating an "ads‑for‑games" model is more compelling than it might initially appear, a notion that has already been demonstrated in linear media.
Services such as Netflix, Disney+, and other streaming platforms have shown that offering an ad‑supported tier alongside a premium subscription can generate substantial revenue while expanding the audience base. Should Xbox’s experiment prove successful, the company would not only preserve its paying subscriber base but also unlock a brand‑new, previously untapped source of income at a moment when the brand is eager for fresh cash flow.
This development matters because console gaming is increasingly positioning itself as a premium service. Prices for games, consoles, accessories, and downloadable content have risen steadily, making it harder for the average consumer to justify the expense. As Xbox itself noted in its announcement, advertising—when executed properly—can help lower the barrier to entry for gamers. The mobile‑gaming sector has already demonstrated that ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases.
Crucially, participation would be optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads, while those who are comfortable with occasional commercial breaks could enjoy a reduced‑cost option. By offering a two‑tier system, Xbox aims to keep its loyal fan base intact while simultaneously making games more accessible to newcomers.
Although no formal survey data exists yet on this particular initiative, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second advertisement if it meant gaining an hour of playtime on a favorite or brand‑new title. Xbox likely has internal data supporting this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that in‑game advertisements consistently outperform TV, social, and other online formats when it comes to ad recall and attribution. In other words, players are far more likely to remember an ad they see while gaming and correctly associate it with the sponsoring brand.
Xbox’s "around‑the‑game" strategy—where ads appear before the gameplay begins rather than embedded within the game world—adds another layer of intrigue. Our data indicate that these pre‑game placements achieve higher recall and attribution scores compared with intrinsic in‑game placements.
This is significant because while we may recall ads seen on television or social feeds, we do not always link them to the correct brand. Gaming appears to occupy a unique position in this respect, which likely explains why companies such as Xbox and EA are exploring ad‑based models more aggressively. It is also worth noting that Xbox’s ads are not meant to interrupt the actual gameplay.
By positioning commercials before the game loads, the experience remains immersive once the player is inside the virtual world. This approach benefits both gamers—who avoid mid‑session interruptions—and advertisers, who gain a captive audience that is primed for brand messaging. Relevance will be key.
No player wants to see an advertisement for cat food when they do not own a cat, or a promotion for a game they have already completed. Contextual, targeted ads that make sense for the individual gamer will reduce the risk of players abandoning the session at the sight of a commercial, while simultaneously giving brands a highly effective platform to reach new consumers. Xbox is venturing into largely uncharted territory.
The first unknown is how the gaming community will react to pre‑game advertising; the second is whether the revenue generated will be sufficient to sustain the model over the long term. The decision to explore ad‑supported streaming reflects a willingness by Xbox CEO Asha Sharma to experiment and take calculated risks.
Only time will reveal whether the strategy delivers the intended results. Historically, many gaming ad models have relied on a "watch an ad, get an extra life" trade‑off. Xbox’s proposal differs: players would watch an ad to gain access to a game they already own, rather than to earn a bonus within the game. Our current data set does not yet show how this will be received, but related research on ad‑format perception indicates that descriptors such as "non‑intrusive" and "immersive" rank among the most positively viewed attributes.
If Xbox—and potentially other platforms—wish to make gaming ads a lasting success, they will need to prioritize these qualities. My forecast is that Xbox will neither be the first nor the last company to trial this approach. Advertising has been part of gaming for years, but it has rarely been designed with the player’s experience at the forefront. Should Xbox manage to strike the right balance, it could pave the way for similar initiatives across the industry, ultimately making video games more affordable and accessible for everyday players.