Virginie Chesnais serves as chief marketing officer at the ad‑tech analytics firm Happydemics. For many years, gamers have approached in‑game advertising with suspicion, and that wariness is understandable. The reputation of ads within video games is mixed at best; players often encounter redirects to unrelated websites or apps, misleading creative, or closing mechanisms that are hard to locate, all of which generate frustration.
A recent study conducted by eMarketer highlighted that 52 percent of gamers would abandon a session if they ran into several disruptive ad elements. Losing half of an audience at the moment you are trying to engage them is hardly a winning formula.
However, the same research also revealed a more optimistic side: one in five gamers said they would play a title more often if the in‑game advertisements were of high quality and relevance. These findings arrive at a time when Xbox is piloting an ad‑supported game‑streaming service, and the overall cost of playing continues to climb. High‑calibre ads could therefore find a natural home within the gaming ecosystem.
The logic behind offering an ad‑supported tier for games mirrors the model that has proven successful in linear media. Services such as Netflix, Disney+, and other video platforms have demonstrated that a steady subscription base can coexist with a lower‑priced, ad‑supported option that still generates significant revenue.
Should Xbox’s experiment succeed, it would not only preserve its paying subscriber base but also unlock a fresh, previously untapped stream of income—something the brand could certainly use given its recent financial pressures. Console gaming is increasingly being positioned as a premium experience. Prices for new titles, hardware, accessories, and downloadable content keep rising, creating a financial barrier for the average player.
Xbox itself has acknowledged that, when executed correctly, advertising can help lower the cost of access to games. The mobile‑gaming sector already provides a proof point: ad‑supported tiers allow players to enjoy games without paying large upfront fees, expanding the market to users who might otherwise stay on the sidelines. Importantly, any advertising model would be optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those willing to watch ads could enjoy a reduced‑price or even free access path.
By offering a two‑tier system, Xbox hopes to keep its core fan base satisfied while simultaneously making games more approachable for newcomers. Although there is no specific survey data on Xbox’s new plan 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 beloved or brand‑new title. Happydemics’ data from 285 in‑game campaigns across the UK and North America support this intuition: in‑game advertisements consistently outperform TV, social, and standard online ads when it comes to recall and correct brand attribution.
The distinction between "around‑the‑game" ads—those displayed before a session starts—and ads that appear inside the gameplay itself is also crucial. Our research shows that pre‑game placements tend to achieve higher recall and attribution scores, while intrinsic in‑game ads excel further down the marketing funnel, delivering stronger lifts in brand image, consideration, interest, and likeability. Combining both formats could give advertisers the best of both worlds, but it also risks provoking greater pushback from players who value an uninterrupted experience. Xbox has pledged that any ads it introduces will be non‑intrusive.
By positioning commercials before the game launches, the company aims to preserve the immersive quality of the gaming session. This approach benefits both sides: players enjoy a seamless experience, and advertisers see their messages delivered in a context where they are more likely to be remembered and positively received. Relevance will be another key factor.
No gamer wants to see an advertisement for cat food when they do not own a cat, or for a game they have already completed. Contextual, well‑targeted ads that align with a player’s interests will reduce the likelihood of users abandoning the session at the sight of a commercial, while giving brands a premium platform to reach a highly engaged audience. Nevertheless, Xbox is navigating 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 move reflects a bold, risk‑taking attitude from Xbox CEO Asha Sharma, who appears willing to experiment with new monetisation strategies. Historically, many gaming ad models have relied on a "watch an ad, get an extra life" mechanic.
Xbox’s proposal is different: players would watch an ad to access a game they already own, rather than to earn a small in‑game benefit. Our existing data set does not yet reveal how this will be perceived, but broader research on ad format perception indicates that descriptors such as "non‑intrusive" and "immersive" are highly valued by consumers. If Xbox can deliver ads that feel natural, relevant, and respectful of the player’s time, it could set a benchmark for the industry.
Successful implementation would likely inspire other console manufacturers and game publishers to explore similar ad‑supported options, potentially democratising access to video games for a wider audience. In summary, while Xbox’s ad‑supported streaming service is still in its experimental phase, the underlying premise is sound: advertising, when executed with quality and relevance, can lower barriers to entry, create new revenue streams, and enhance brand recall. The challenge will be to balance monetisation with the immersive, uninterrupted experience that gamers cherish. Should Xbox manage this equilibrium, it could pave the way for a more inclusive future in console gaming, where cost is less of a hurdle and high‑quality content remains within reach for everyday players.