Virginie Chesnais serves as the chief marketing officer at Happydemics, an analytics platform that specializes in advertising technology. For many years, gamers have looked at in‑game advertising with suspicion, and the wariness is understandable.
The reputation of ads in video games is mixed at best; players often encounter redirects to unrelated sites or apps, deceptive messaging, or tiny close buttons that are difficult to locate, all of which lead to frustration. A recent study conducted by eMarketer highlighted that 52 percent of gamers would stop playing if they were bombarded with multiple disruptive ad elements. Losing half of an audience at the very moment you are trying to engage them is hardly an effective approach. However, 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 felt relevant. This suggests that well‑executed advertising can coexist with enjoyable gameplay. Xbox is currently piloting an ad‑supported game‑streaming service, and as the overall cost of gaming continues to climb, premium‑quality ads could find a welcoming home within the ecosystem. The argument for offering an ad‑for‑games model is more compelling than many assume, especially when we look at the success of linear media platforms.
Services such as Netflix, Disney+, and other streaming giants have demonstrated that a mixed revenue model—combining subscription fees with ad‑supported tiers—can be highly profitable. Should Xbox’s experiment prove successful, it would not only preserve its existing subscriber base but also unlock a brand‑new revenue stream at a moment when the company could greatly benefit from additional income. The relevance of this development is underscored by the fact that console gaming is increasingly being positioned as a premium service. Prices for games, consoles, accessories, and downloadable content have risen steadily, making it more difficult for the average consumer to justify the expense.
This creates a barrier that discourages many potential players from entering the market. Xbox itself has stated that, when executed correctly, advertising can lower the cost of accessing games. Mobile gaming has already shown that ad‑supported tiers can provide a gateway for players who are unwilling or unable to pay large upfront costs. By offering a free or low‑cost entry point, developers can attract a broader audience while still monetizing through ads.
Importantly, the ad‑supported option would be entirely optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those who are comfortable with occasional ads could enjoy the same content at a reduced price. This two‑tier system aims to retain loyal fans while simultaneously making games more approachable for newcomers. Although there is no concrete survey data on the specific Xbox announcement yet, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second advertisement if it granted them an hour of playtime on a favorite or new title.
Xbox’s internal data likely supports this hypothesis. Happydemics has analyzed 285 in‑game campaigns across the United Kingdom and North America, finding that in‑game advertisements consistently outperform television, social media, and other online formats when it comes to recall and attribution.
In other words, players are more likely to remember an ad they saw while gaming and correctly associate it with the brand that displayed it. Xbox’s “around‑the‑game” strategy—showing ads before the game loads rather than embedding them within the gameplay—adds another layer of intrigue. Our research indicates that these pre‑game placements achieve higher recall and attribution scores compared with ads that appear directly inside the game world. This distinction matters because while we can often remember ads we encounter on TV or scrolling through feeds, we don’t always link those impressions to the correct brand.
Gaming appears to be a unique environment where brand‑to‑ad connections are stronger, which likely explains why companies like Xbox and EA are exploring ad‑based models more aggressively. It is crucial to note that Xbox’s ads would be pre‑game, not intrusive during the actual play session. In‑game ad formats tend to excel further down the marketing funnel, delivering stronger lifts in brand image, consideration, interest, and likeability.
A hybrid approach that combines both pre‑game and in‑game ads could theoretically offer the best of both worlds for advertisers, but it also risks heightened pushback from players who value an uninterrupted experience. Xbox has promised that any ads shown will be non‑intrusive. By placing them before the game starts, they avoid breaking the immersive flow that gamers cherish. This is beneficial not only for players but also for advertisers, who want their messages to feel like a natural part of the experience rather than a disruptive interruption.
Relevance will be a key factor. No gamer wants to see an advertisement for cat food if they don’t own a cat, or for a game they have already completed. By delivering contextual, personalized ads that make sense for each user, Xbox can minimize the chance that players abandon the session at the sight of an ad, while simultaneously giving brands an effective platform to reach new audiences.
Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to the presence of ads, and the second is whether the ad revenue will be sufficient to sustain the model over the long term. The decision to explore ad‑supported game streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with new business models. Historically, many of our gaming‑ad initiatives have revolved around “watch an ad, earn an extra life” mechanics.
Xbox’s proposition is different: players would watch an ad to gain access to a game they already own. Our existing data set does not yet reveal how this particular exchange will be perceived. Related research on ad‑format perception shows that when respondents are asked to describe the ad experience with positive adjectives, terms like “non‑intrusive” and “immersive” frequently emerge as top descriptors. If Xbox—and potentially other platforms in the future—are to make advertising a lasting component of gaming, they will need to prioritize these qualities.
My forecast is that Xbox will neither be the first nor the last company to test such a strategy. Advertising within games has existed for many years, but it has often been implemented without the player’s best interests in mind.
Should Xbox succeed in delivering ads that feel seamless and optional, it could pave the way for other developers to adopt similar models, ultimately making video games more accessible to everyday gamers.