Virginie Chesnais serves as the chief marketing officer at Happydemics, a platform that specializes in ad‑tech analytics. For many years, gamers have been skeptical of advertisements that appear within games, and their concerns are understandable. In‑game ads often suffer from a poor reputation, plagued by issues such as redirects to unrelated websites or apps, misleading content, and hide‑away close buttons that frustrate users. A recent study conducted by eMarketer highlighted that 52 % of players would abandon a title after encountering several disruptive ad elements.
Losing half of your potential audience at the very moment you try to engage them is hardly a winning formula. 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 a high quality and felt relevant. This insight arrives at a time when Xbox is piloting an ad‑supported game‑streaming service, and the overall expense of gaming continues to climb.
Well‑crafted ads could therefore find a natural home within the gaming ecosystem. The argument for introducing a modest ad‑for‑games model is more compelling than many anticipate, and it already has a precedent in linear media.
Services such as Netflix, Disney+ and other streaming platforms have demonstrated that a hybrid model—offering both ad‑free and ad‑supported tiers—can generate substantial revenue while keeping a broad user base. Should Xbox’s experiment succeed, it would not only preserve the existing subscriber base but also unlock a fresh, previously untapped income stream at a moment when the brand could use the financial boost.
The relevance of this development is underscored by the fact that console gaming is evolving into a premium offering. Prices for games, consoles, accessories, and downloadable content keep rising, making it increasingly difficult for the average consumer to justify the spend. This creates a barrier that discourages casual or budget‑conscious gamers from entering the market. Xbox itself has stated that, when executed correctly, advertising can lower the cost of access to gaming experiences.
The mobile‑gaming sector already provides a clear illustration: ad‑supported tiers enable players to engage with games without paying large upfront fees, opening the door for a wider audience. Crucially, the model remains optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads.
By offering a two‑tier system, Xbox aims to keep its loyal community satisfied while simultaneously making games more approachable for newcomers. Although there is no specific survey data on this latest announcement, it is reasonable to assume that a large majority of gamers would tolerate a short, 30‑second advertisement if it meant gaining an hour of gameplay on a favorite or newly released title.
Xbox likely has internal data supporting 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 when it comes to ad recall and attribution. In other words, players are more likely to remember an ad they saw within a game and correctly associate it with the brand that displayed it.
This is where Xbox’s “around‑the‑game” approach—ads that appear before the game launches rather than during gameplay—becomes especially intriguing. Our data show that these pre‑game placements achieve higher recall and attribution rates compared with ads embedded directly inside the game environment. The distinction matters because, while we can often recall ads seen on TV or scrolling through a feed, we do not always link those impressions to a specific brand. Gaming, by contrast, appears to create a stronger mental connection between the ad and the advertiser, which may explain why companies like Xbox and EA are increasingly exploring ad‑based revenue models.
It is important to note that Xbox’s ads will not interrupt the core gameplay; they will be shown before the session begins. Traditional in‑game ad formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and overall likability. A hybrid strategy that combines both pre‑game and in‑game ads could theoretically offer the best of both worlds, though it also risks heightened resistance from players. Xbox has pledged that the advertisements will be non‑intrusive.
By placing ads prior to the start of a game, the immersive experience remains untouched, a factor that matters not only to gamers but also to advertisers who want their messages to complement rather than disrupt the user journey. Relevance will be key.
No player wants to see an ad for cat food if they don’t own a cat, or for a game they have already completed. Contextual, targeted ads that make sense within the gaming session will help prevent users from abandoning the experience the moment an ad appears, while simultaneously giving brands a premium platform to reach new audiences. Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how the gaming community will react to these pre‑game adverts; the second is whether the revenue generated will justify making the model a permanent feature.
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 this strategy pays off. Historically, many of our gaming‑ad projects have relied on a “watch an ad, earn an extra life” premise. Xbox’s proposal differs: it asks players to watch an ad simply to access a game they already own.
Our existing data set does not yet provide insight into how this will be received. However, broader research on ad‑format perception indicates that descriptors such as “non‑intrusive” and “immersive” rank among the most positively received attributes. If Xbox—and potentially other platforms—aim to make advertising a sustainable part of gaming, these two metrics will be essential to monitor. My forecast is that Xbox will neither be the first nor the last to trial this approach.
Advertising within games has existed for years, but it has rarely been designed with the player’s experience at the forefront. Should Xbox manage to strike the right balance, it could pave the way for similar initiatives across the industry, ultimately making video games more affordable and accessible for everyday players.