Virginie Chesnais serves as 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 that wariness is understandable. The reputation of ads in video games is mixed: players often encounter redirects to unrelated websites or apps, misleading content, or dismiss buttons that are difficult to locate, all of which generate frustration.
A recent study conducted by eMarketer revealed that 52 % of gamers would stop playing if they ran into multiple intrusive ad elements. Losing half of an audience at the moment you are trying to engage them is hardly a winning strategy.
Nevertheless, advertisements do not have to be a nuisance. The same research indicated 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 presently piloting an ad‑supported game‑streaming service and the overall cost of gaming continuing to climb, well‑crafted ads could find a receptive home within the medium. The argument for introducing a modest advertising model to games is more compelling than it might initially appear, and it is already partially validated by the success of linear media. Streaming giants such as Netflix, Disney+, and others have demonstrated that a steady subscription service can coexist with ad‑supported tiers, generating additional revenue streams.
Should Xbox’s experiment prove effective, it would not only preserve its paying subscriber base but also unlock a fresh, previously untapped source of income—something the brand could certainly use at this stage. This is significant because console gaming is increasingly being positioned as a premium offering.
Prices for games, consoles, accessories, and downloadable content keep rising, making it harder for the average consumer to justify the expense. These escalating costs create a barrier that keeps many potential players on the sidelines.
Xbox itself has stated that, when executed correctly, advertising can lower the cost of accessing games. The mobile‑gaming sector already shows that ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases, allowing them to experience a game in exchange for viewing ads. Importantly, participation would be entirely optional.
Players who prefer an ad‑free experience could continue to do so by paying a subscription fee. By offering a two‑tier system, Xbox hopes to keep its loyal fanbase satisfied while simultaneously opening the door for newcomers who might be deterred by high price points. Although there is no specific survey data on this particular announcement yet, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second advertisement if it meant they could play one of their favorite titles—or even a brand‑new game—for an hour.
Xbox likely has internal data that supports this intuition. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows 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 sponsoring brand. This is where Xbox’s “around‑the‑game” strategy—ads displayed before the game begins rather than embedded within the gameplay—becomes intriguing. Our data indicate that these pre‑game placements achieve higher recall and attribution scores compared with ads that appear directly inside the game environment.
The distinction matters because, while we can often remember ads seen on TV or scrolling through a social feed, that memory does not always translate into a clear brand connection. Gaming appears to operate in its own league for this metric, which may explain why companies like Xbox and EA are increasingly exploring ad‑based models. It is essential to note that Xbox’s ads would not be intrusive in‑game; they would appear in the pre‑game window. Intrinsic in‑game formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and overall likability.
A hybrid approach—combining both pre‑game and in‑game ads—could offer advertisers the best of both worlds, though it might also provoke greater pushback from players. Xbox has emphasized that the advertisements will be non‑intrusive, a claim that is easy to understand. By placing ads before gameplay starts, the company ensures that the immersive experience remains untouched.
This is beneficial not only for gamers but also for advertisers, who want their messages to enhance rather than disrupt the user journey. Relevance will be key. No one 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. By delivering contextual, purposeful ads, Xbox can keep players from abandoning the experience while giving brands a high‑impact platform to reach new audiences.
Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to this new ad format; the second is whether the revenue generated 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 shown a willingness to experiment with innovative approaches. Only time will reveal whether the strategy delivers the intended results. Historically, our work in gaming advertising has centered on “watch an ad, earn an extra life” type incentives. Xbox’s proposal asks players to watch an ad simply to access a game they already own—a different proposition for which we currently lack direct data.
However, 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 be critical to monitor. My forecast is that Xbox will neither be the first nor the last platform to trial such a model.
Advertising within games has existed for years, but it has not always been designed with the player’s experience at the forefront. Should Xbox manage to strike the right balance, it could pave the way for other gaming companies to follow, ultimately making video games more affordable and accessible to everyday gamers.