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 skepticism, and their concerns are understandable.
The reputation of ads in video games is often tarnished by experiences such as being redirected to unrelated websites or apps, encountering deceptive messaging, or struggling to locate a close button, all of which can ruin the play experience. A recent study conducted by eMarketer highlighted that 52 % of gamers would abandon a session if they ran into several intrusive advertising elements. Losing half of an audience at the moment you are trying to engage them is hardly an effective approach.
However, the same research also revealed a more optimistic side: one in five players indicated they would actually play a title more often if the in‑game advertisements were of a high quality and felt relevant. This insight arrives at a time when Xbox is piloting a new ad‑supported game‑streaming service, and the overall cost of gaming continues to climb.
In such an environment, well‑crafted ads could find a welcoming niche within the gaming ecosystem. The argument for introducing a modest ad‑based model for games is stronger than many anticipate, and it mirrors successes seen in linear media. Services like Netflix, Disney+, and other streaming platforms have demonstrated that offering both ad‑free and ad‑supported tiers can generate substantial revenue while expanding the audience base.
Should Xbox’s experiment prove viable, it would not only preserve revenue from existing subscription holders but also unlock a fresh, previously untapped income stream—something the brand could greatly benefit from right now. The relevance of this shift is underscored by the fact that console gaming is increasingly positioning itself as a premium offering. Prices for games, consoles, accessories, and downloadable content have risen steadily, creating a financial barrier for the average player. Xbox itself has acknowledged that, when executed correctly, advertising can lower the barrier to entry and make gaming more accessible.
We have already observed this dynamic in mobile gaming, where ad‑supported tiers allow players to try a game without paying an upfront fee. The same principle can be applied to console titles: users who prefer not to watch ads can continue to do so by paying a subscription fee, while those who are comfortable with occasional commercials gain a cheaper route to the same content. By providing a two‑tiered system, Xbox hopes to retain its loyal fan base while simultaneously inviting newcomers who might otherwise be deterred by cost. Although concrete survey data on the current announcement 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 gameplay on a favorite or newly released title.
Xbox’s internal research likely supports this hypothesis. Data from Happydemics covering 285 in‑game campaigns across the United Kingdom and North America shows that in‑game advertising consistently outperforms television, social media, and standard online ads in terms of recall and attribution.
Players are more likely to remember an ad they saw while playing and correctly associate it with the sponsoring brand. This is where Xbox’s "around‑the‑game" approach—ads displayed before the game begins rather than embedded within the gameplay—becomes compelling.
Our research indicates that pre‑game placements enjoy a clear advantage in recall and attribution compared with ads that appear directly inside the game world. The distinction matters because, while we can often recall ads seen on TV or scrolling through feeds, that memory does not always translate into brand recognition.
Gaming appears to occupy a unique position where recall and brand linkage are particularly strong, which likely explains why companies such as EA and now Xbox are exploring ad‑based models more aggressively. It is essential to note that Xbox’s ads are planned to be pre‑game rather than in‑game. 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 blends both pre‑game and in‑game ads could theoretically give advertisers the best of both worlds, though it might also provoke greater resistance from players who are sensitive to interruptions.
Xbox has promised that the ads will be non‑intrusive. By placing commercials before the actual gameplay starts, the immersive experience remains untouched, which is a win for both gamers and advertisers. Advertisers want their messages to feel integrated rather than disruptive, and gamers want uninterrupted play.
Relevance will be key. Nobody 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, audience‑specific ads, Xbox can keep players from abandoning the experience while providing brands with a highly effective platform to reach new consumers. 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 novel approaches. Whether this gamble pays off remains to be seen. Historically, many gaming ad models have relied on "watch an ad, earn an extra life" mechanics.
Xbox’s proposal differs: players would watch an ad to access a game they already own, rather than to earn a reward. Our current data set does not yet reveal how this will be received. However, broader research on ad format perception indicates that descriptors such as "non‑intrusive" and "immersive" consistently rank among the most favorable. If Xbox—and potentially other platforms—aim to make advertising a lasting component of gaming, these two attributes will be critical to monitor.
In my view, Xbox will neither be the first nor the last company to trial this kind of strategy. Advertising has existed in games for years, but rarely with the player experience at the forefront.
Should Xbox manage to strike the right balance, it could pave the way for similar initiatives across the industry and, importantly, make video games more affordable for everyday gamers.