Virginie Chesnais serves as Chief Marketing Officer at Happydemics, an analytics platform that focuses on advertising technology. For many years, gamers have approached in‑game advertising with suspicion, and their concerns are understandable. The reputation of ads in video games is mixed, often marred by redirects to unrelated sites, misleading content, or poorly designed close buttons that are difficult to locate. A recent study conducted by eMarketer highlighted that 52 % of players would abandon a game if they encountered multiple intrusive ad elements.
Losing half of an audience at the very moment you try to engage them is hardly an effective tactic. Nevertheless, advertisements do not have to be detrimental. The same research revealed that one in five gamers would actually increase the frequency with which they played a title if the in‑game ads were of a high quality and felt appropriate.
This insight arrives at a moment when Xbox is piloting an ad‑supported game‑streaming service, and the overall cost of gaming continues to climb. Well‑executed, premium‑grade ads could therefore find a receptive home within the gaming ecosystem. The argument for introducing a modest advertising model into games is stronger than many anticipate, and it has already been validated to some extent by the success of linear media platforms. Services such as Netflix, Disney+, and other streaming giants have demonstrated that offering an ad‑supported tier can generate significant revenue while still delivering a reliable product.
Should Xbox’s experiment prove viable, the company would not only preserve its paying subscriber base but also unlock a fresh, previously untapped source of income at a time when the brand is eager for additional cash flow. This development matters because console gaming is increasingly being positioned as a premium experience. The price tags attached to new games, consoles, accessories, and downloadable content are rising, making it harder for the average consumer to justify the expense. In Xbox’s own words, when executed correctly, advertising can lower the barrier to entry for gamers.
The mobile‑gaming sector already shows how 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 commercials could enjoy a lower‑cost entry point.
By offering a two‑tier system, Xbox hopes to retain its loyal fan base while simultaneously expanding accessibility for newcomers. Although concrete survey data on this specific initiative is not yet available, 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 newly released title. Xbox’s internal research is likely to confirm this hypothesis.
Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America indicates that in‑game advertising consistently outperforms television, social media, and other online formats in terms of ad recall and attribution. In other words, players are more likely to remember an ad they saw while gaming and correctly associate it with the sponsoring brand.
Xbox’s “around‑the‑game” approach—showing ads before the gameplay begins rather than embedding them within the virtual world—adds another layer of intrigue. Our data reveal that pre‑game placements generate stronger recall and attribution scores compared with ads that appear directly inside the game environment.
This distinction matters because, while viewers can often remember a commercial they saw on TV or scrolling through a feed, they may not always link that memory to the brand. Gaming, by contrast, appears to create a tighter bond between the ad and the advertiser, which likely explains why companies such as EA and Xbox are increasingly exploring ad‑based monetisation models. It is important to note that Xbox’s ads are not in‑game; they are displayed before the game launches. Traditional in‑game formats tend to excel further down the marketing funnel, delivering higher lifts in brand image, consideration, interest, and overall likability.
A hybrid strategy that combines both pre‑game and in‑game ads could, in theory, provide the best of both worlds for marketers, but it also risks provoking greater resistance from players who are sensitive to interruptions. Xbox has pledged that any advertisements will be non‑intrusive. By confining ads to the pre‑game window, the company aims to preserve the immersive quality of the actual gameplay.
This approach benefits both players—who avoid disruption during the core experience—and advertisers, who want their messages to feel like a natural part of the overall journey rather than an annoyance. Relevance will be key. No gamer wants to see an advertisement for cat food when they don’t own a cat, or for a game they have already completed.
By delivering contextual, well‑targeted ads, Xbox can keep players from abandoning the session at the first sign of a commercial, while simultaneously offering brands a highly engaged audience. Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players 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 bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has shown a willingness to experiment with new business models.
Only time will reveal whether the strategy delivers the intended results. Historically, many gaming ad campaigns have followed a “watch an ad, earn an extra life” format, providing a clear, tangible benefit to the player.
Xbox’s proposal is different: it asks players to watch an ad in order to access a game they already own. Our existing data set does not yet indicate how this trade‑off will be received.
Research on ad‑format perception—where respondents who recall an ad are asked to describe the format using positive adjectives—has consistently highlighted “non‑intrusive” and “immersive” as top descriptors. If Xbox and future adopters aim to make gaming ads successful, these two attributes will need to be closely monitored and optimised. In my view, Xbox will not be the first nor the last platform to experiment with such a model.
Advertising within games has existed for years, but often without the player’s experience as the primary focus. Should Xbox manage to strike the right balance, it could pave the way for other companies to follow, ultimately making video games more affordable and accessible for the everyday gamer.