Virginie Chesnais serves as chief marketing officer at the ad‑technology analytics firm Happydemics. While many gamers have historically viewed in‑game advertising with suspicion, their concerns are not unfounded.
The reputation of ads in video games is mixed, often plagued by intrusive redirects, misleading content, or hard‑to‑find close buttons that frustrate players. A recent study from eMarketer highlighted that 52 % of respondents would abandon a game if they encountered multiple disruptive advertising elements.
Losing half of an audience at the moment you are trying to engage them is clearly not a sustainable approach. 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 ads were of high quality and relevance. These findings come at a time when Xbox is piloting an ad‑supported game‑streaming service, and the overall cost of gaming continues to climb.
High‑caliber advertisements could therefore find a welcoming niche within the gaming ecosystem. The logic behind offering an ad‑for‑games model mirrors what has already succeeded in linear media. Platforms such as Netflix, Disney+ and other streaming services have demonstrated that a mixed revenue model—combining subscription fees with ad‑supported tiers—can generate substantial income while keeping a broad audience engaged. Should Xbox’s experiment prove effective, it would not only preserve its paying subscriber base but also unlock a previously untapped revenue stream, a development the company could certainly use given recent financial pressures.
The relevance of this strategy becomes clearer when we consider how console gaming is evolving into a premium experience. Prices for consoles, games, accessories and downloadable content have risen steadily, making it increasingly difficult for the average consumer to justify the expense. Xbox itself has stated that, when executed correctly, advertising can lower the barrier to entry and make gaming more affordable.
Mobile gaming has already shown that ad‑supported tiers can provide a viable entry point for players who are unwilling or unable to make large upfront purchases. By offering a similar optional model on consoles, Xbox hopes to keep its core fan base happy—those who prefer an ad‑free experience and are willing to pay for a subscription—while simultaneously opening the door for newcomers who might only be willing to watch a short commercial in exchange for gameplay time. Although there is no specific survey data on Xbox’s new plan yet, it is reasonable to assume that many gamers would tolerate a 30‑second advertisement if it granted them an hour of playtime on a beloved or brand‑new title.
Happydemics data from 285 in‑game campaigns across the UK and North America supports this notion: in‑game ads consistently outperform television, social and other online formats in terms of recall and accurate brand attribution. Xbox’s “around‑the‑game” approach—showing ads before the game starts rather than embedding them within the gameplay—adds another layer of interest. Our research indicates that pre‑game placements generate stronger ad recall and attribution compared with intrinsic in‑game placements. This distinction matters because, while we can often remember ads seen on TV or social feeds, we do not always connect them to the sponsoring brand.
Gaming appears to excel in this metric, which likely explains why companies like Xbox and EA are increasingly exploring ad‑based models. It is crucial to note that Xbox’s ads are not meant to interrupt the gameplay itself. By positioning advertisements before the game begins, the experience remains immersive once the player is inside the virtual world. This separation benefits both the player—who avoids disruption—and the advertiser, who gains a captive audience without compromising the game’s flow.
Relevance will be key. Players will quickly tune out ads that feel unrelated, such as promotions for cat food to someone who doesn’t own a cat, or ads for games they have already completed.
Contextual, well‑targeted advertising can keep players engaged and provide brands with an effective platform to reach new demographics. Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how gamers will react to a pre‑game ad model; the second is whether the revenue generated will be sufficient to sustain the initiative over the long term. The move reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who appears willing to experiment with new monetisation strategies.
Historically, many gaming ad models have been based on a “watch an ad, earn an extra life” premise. Xbox’s proposal differs: players would watch an ad to access a game they already own.
Our existing data does not yet reveal how this will be received, but broader research on ad format perception shows that descriptors such as “non‑intrusive” and “immersive” rank highly among positive responses. If Xbox can deliver on those expectations, it may set a benchmark for future ad‑supported gaming experiences. In my view, Xbox will not be the first nor the last console to experiment with this approach. Advertising has been part of gaming for years, but rarely with the player’s experience at the forefront.
Should Xbox manage to strike the right balance, it could pave the way for other companies to follow, ultimately making video games more accessible to a wider audience while opening new revenue channels for the industry.