Virginie Chesnais serves as the chief marketing officer at Happydemics, a platform that specializes in ad‑tech analytics. For many years, gamers have looked at in‑game advertising with suspicion, and their wariness is understandable. The reputation of ads in video games is mixed at best, often marred by frustrating experiences such as redirects to unrelated websites or apps, misleading content, and the absence of an obvious way to close the ad.
A recent study by eMarketer highlighted that 52 % of players would abandon a session if they encountered multiple intrusive ad elements. Losing half of your audience at the very moment you’re trying to engage them is hardly a winning strategy.
However, the same research also revealed a more optimistic side: one in five gamers said they would actually play a title more often if the in‑game advertisements were of high quality and relevance. This insight arrives at a time when Xbox is piloting an ad‑supported game‑streaming service, and when the overall cost of gaming continues to climb. High‑caliber, well‑targeted ads could therefore find a receptive home within the gaming ecosystem.
The argument for a hybrid "ads‑for‑games" model is stronger than many anticipate, and it has already been demonstrated in the realm of linear media. Services like Netflix, Disney+, and other streaming platforms have shown that offering an ad‑supported tier can generate significant revenue while still delivering a consistent product. If Xbox’s experiment proves successful, it could not only preserve its subscription base but also unlock a previously untapped revenue stream—a development the brand urgently needs. Console gaming is increasingly positioned as a premium experience.
Prices for games, consoles, accessories, and downloadable content are all rising, creating a financial barrier for the average player. Xbox itself has acknowledged that, when executed correctly, advertising can lower the cost of entry for gamers. The mobile‑gaming sector already provides evidence that ad‑supported tiers enable players to engage with games without the burden of large upfront payments.
Crucially, any advertising model Xbox adopts will be optional. Players who prefer an ad‑free experience can continue to pay a subscription fee, while those who are willing to view ads can access the same content at a reduced cost. This two‑tier approach aims to keep the existing loyal fan base satisfied while simultaneously expanding accessibility for newcomers.
Although there is no concrete survey data on this particular rollout yet, it is reasonable to assume that most gamers would tolerate a short, 30‑second commercial if it granted them an hour of gameplay on a favorite or newly released title. Xbox likely has internal data supporting that assumption. 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 in terms of recall and attribution.
Players are more likely to remember an ad they saw while playing and correctly associate it with the brand that served it. Xbox’s "around‑the‑game" strategy—showing ads before the game begins rather than embedding them within the gameplay—adds another layer of appeal.
Our data indicate that pre‑game placements achieve higher recall and attribution scores compared with intrinsic in‑game placements. This distinction matters because, while traditional ads on TV or social media may be remembered, they are not always linked to the correct brand in the consumer’s mind. Gaming appears to excel in this metric, which explains why companies such as Xbox and EA are increasingly exploring ad‑based models.
It is essential to note that Xbox’s ads are not in‑game but pre‑game. In‑game formats tend to excel further down the funnel, delivering stronger lifts in brand image, consideration, interest, and likeability.
A combined approach—leveraging both pre‑game and in‑game ads—could theoretically give advertisers the best of both worlds, though it also risks greater pushback from players who value an uninterrupted experience. Xbox has promised that its advertisements will be non‑intrusive. By placing ads before the gameplay starts, the company aims to preserve the immersive nature of the gaming session.
This is a crucial consideration not only for players but also for advertisers, who want their messages to complement rather than disrupt the experience. Relevance will be another key factor. No gamer wants to see an ad for cat food when they don’t own a cat, or a promotion for a game they have already completed. Contextual, targeted ads that make sense to the player will help keep the audience engaged and reduce the likelihood of them abandoning the session.
Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to a steady stream of pre‑game ads; the second is whether the revenue generated will be sufficient to sustain the model over the long term.
The move toward ad‑supported game streaming reflects a bold, risk‑taking attitude from Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with new business models. Only time will reveal whether this strategy pays off. Historically, many gaming ad campaigns have relied on the "watch an ad, get an extra life" model. Xbox’s proposal differs: it asks players to watch an ad to access a game they already own.
Our existing data set does not yet indicate how this will be received. However, research on ad format perception shows that descriptors such as "non‑intrusive" and "immersive" are among the most positively received. If Xbox—and potentially other platforms—can deliver ads that meet these criteria, they will be well positioned for success.
My forecast is that Xbox will not be the first nor the last to trial this approach. Advertising within games is not new, but it has rarely been designed with the player’s experience as the primary focus. Should Xbox manage to strike the right balance, it could pave the way for similar initiatives across the industry and, importantly, make video games more affordable and accessible for everyday gamers.