Virginie Chesnais serves as the chief marketing officer at Happydemics, a platform that specializes in ad‑tech analytics. For many years, gamers have approached in‑game advertising with suspicion, and their wariness is understandable. The reputation of ads in video games is mixed at best; players often encounter redirects to unrelated websites or apps, misleading content, or obscure close buttons that are difficult to locate, all of which fuel frustration. A recent study by eMarketer highlighted that 52 percent of gamers would abandon a session if they ran into multiple intrusive ad elements.
Losing half of an audience at the moment you are trying to engage them is hardly an effective tactic. However, advertisements do not have to be detrimental. The same research revealed that one in five players would actually increase the frequency with which they play a title if the in‑game ads were of a high quality and felt relevant. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming climbing steadily, there is a genuine opportunity for well‑crafted ads to find a welcoming niche within the medium.
The argument for integrating a form of "ads‑for‑games" model is more compelling than many might assume, especially when we look at the success of linear media platforms. Services such as Netflix, Disney+, and other streaming giants have demonstrated that offering both ad‑free and ad‑supported tiers can generate significant revenue while keeping a broad subscriber base. Should Xbox’s experiment prove successful, it could not only preserve its paying subscribers but also unlock a brand‑new revenue stream—a development the company could certainly use at this stage.
This issue matters because console gaming is increasingly being positioned as a premium experience. The price tags attached to new games, consoles, accessories, and downloadable content continue to rise, making it harder for the average consumer to justify the expense. Xbox itself has noted that, when executed correctly, advertising can lower the barrier to entry for gamers. Mobile gaming already provides a clear precedent: ad‑supported tiers allow players to access content without the need for a large upfront purchase, expanding the market to users who might otherwise stay away.
Crucially, any advertising model Xbox introduces would be optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads, while those willing to tolerate a brief commercial could enjoy a reduced cost or even free access. By offering a two‑tier system, Xbox aims to retain its loyal fan base while simultaneously making games more approachable for newcomers.
Although there is no concrete survey data on this particular rollout yet, it is reasonable to assume that the majority of gamers would tolerate a 30‑second advertisement if it meant they could play a beloved title or try a new game for an hour. Xbox likely has internal data supporting this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that in‑game advertisements consistently outshine TV, social, and other online formats in terms of 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 behind it.
This is where Xbox’s "around‑the‑game" strategy—ads displayed before the gameplay begins rather than embedded within the experience—becomes intriguing. Our data indicate that pre‑game placements achieve higher recall and attribution scores compared with intrinsic in‑game placements. While traditional TV or social ads may be memorable, they do not always translate into a clear brand connection.
Gaming appears to occupy its own unique space in this regard, which likely explains why companies such as Xbox and EA are increasingly exploring ad‑based models. It is important to note that Xbox’s ads will not interrupt the actual gameplay; they will appear in the pre‑game lobby or loading screen.
In‑game ad formats tend to excel further down the marketing funnel, delivering stronger lifts in brand image, consideration, interest, and likability. A hybrid approach that combines both pre‑game and in‑game ads could theoretically offer the best of both worlds for advertisers, though it may also provoke greater resistance from players who value an uninterrupted experience. Xbox has assured users that the advertisements will be non‑intrusive. By confining ads to the moments before a game starts, the company hopes to preserve the immersive nature of the experience.
This approach benefits both players—who avoid disruption during play—and advertisers, who want their messages to be part of a seamless experience rather than a jarring interruption. 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.
Contextual, targeted ads that make sense for the individual player will help prevent premature exits and will give brands a more effective platform to reach fresh audiences. Nevertheless, Xbox is navigating uncharted waters. The first unknown is how players will react to seeing ads in a console environment, and the second is whether the revenue generated will justify a long‑term commitment to the model. The decision to explore ad‑supported streaming reflects the boldness of Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment and take calculated risks.
Whether this strategy will pay off remains to be seen. Historically, many gaming ad campaigns have followed a "watch an ad, earn an extra life" model.
Xbox’s proposition is different: players would watch an ad to gain access to a game they already own, a scenario not yet captured in our existing data sets. Nonetheless, broader research on ad format perception shows that when respondents recall an ad, they often describe the format as "non‑intrusive" and "immersive," two attributes that rank among the most favorable. If Xbox—and potentially other platforms in the future—are to make advertising in gaming a sustainable practice, these two metrics will need close monitoring. My forecast is that Xbox will neither be the first nor the last to trial such a strategy.
Advertising has been part of gaming for years, but rarely with the player’s experience at the forefront. Should Xbox succeed in delivering ads that respect the gamer’s immersion while providing value, it could pave the way for other developers and publishers to adopt similar models, ultimately making video games more affordable and accessible for everyday players.