Virginie Chesnais serves as chief marketing officer at Happydemics, an analytics platform for advertising technology. For many years, gamers have approached in‑game advertising with suspicion, and that wariness is understandable.
The reputation of ads in video games is mixed at best; players often encounter redirects to unrelated sites or apps, misleading creative, or hidden close buttons that are difficult to locate, all of which generate frustration. A recent study by eMarketer highlighted that 52 % of gamers would abandon a session if they ran into several intrusive ad elements. Losing half of your audience the moment you try to engage them is hardly an effective approach. However, advertising does not have to be a negative experience.
The same research revealed that one in five gamers would actually increase the frequency with which they played a title if the in‑game ads were high‑quality and well‑executed. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of playing continuing to climb, there is a real chance that premium‑grade ads could find a welcoming home inside the gaming ecosystem.
The rationale for introducing an "ads‑for‑games" model is more compelling than many assume, and it has already been demonstrated to some extent by linear media. Services such as Netflix, Disney+, and other streaming platforms have proven that offering both ad‑free and ad‑supported tiers can generate substantial revenue while keeping a broad subscriber base. Should Xbox’s experiment succeed, it would not only preserve its paying subscribers but also unlock a completely new revenue stream—something the brand could certainly use at this juncture. This issue matters because console gaming is increasingly being positioned as a premium offering.
Prices for games, consoles, accessories, and downloadable content keep rising, making it harder for the average consumer to justify the expense and creating a barrier for casual or budget‑conscious players. Xbox itself has stated that, when executed correctly, advertising can lower the cost of entry to gaming. Mobile gaming already provides a clear example: ad‑supported tiers let players enjoy a game without paying a large upfront fee, relying instead on occasional commercial breaks.
Crucially, any such system would be optional. Players who prefer an uninterrupted experience could simply pay a subscription fee to avoid ads, while those who are comfortable with occasional commercials could enjoy a reduced‑price or even free access model. By offering a two‑tier structure, Xbox hopes to retain its core fan base while simultaneously making games more approachable for newcomers. Although there is no concrete survey data on the specific Xbox announcement yet, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second advertisement if it meant gaining an hour of playtime on a favorite or new title.
Xbox likely has internal data that supports this hypothesis. Happydemics analyzed 285 in‑game campaigns across the United Kingdom and North America and found that in‑game advertising consistently outperforms television, social media, and standard online ads 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 that displayed it. This is where Xbox’s "around‑the‑game" strategy—showing ads before the game launches rather than embedded within the gameplay—becomes intriguing.
Our data indicate that pre‑game placements generate higher recall and attribution scores compared with ads that appear directly inside the game world. The distinction matters because, while we can often recall ads we see on TV or scrolling through a feed, that recall does not always translate into a clear brand connection.
Gaming appears to be in a league of its own for forging that link, which likely explains why companies such as Xbox and Electronic Arts are increasingly exploring ad‑based models. It is also important to note that Xbox’s ads are not meant to interrupt the actual gameplay; they will appear before the session starts.
In‑game ad formats tend to excel later in the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and overall likeability. A hybrid approach that blends pre‑game and in‑game placements could, theoretically, give advertisers the best of both worlds, though it might also provoke greater pushback from players who value an uninterrupted experience. Xbox has pledged that its advertisements will be non‑intrusive.
By delivering commercials prior to the start of a game, the platform aims to preserve the immersive nature of the experience. This is a crucial consideration not only for gamers but also for advertisers, who want their messages to complement rather than disrupt the user journey. Relevance will be another key factor.
No one wants to see a cat‑food commercial when they don’t own a cat, or a promotion for a game they have already completed. By ensuring that ads are contextually appropriate and tied to the player’s interests, Xbox can keep viewers engaged and prevent them from abandoning the session at the first sign of an irrelevant spot.
Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how the gaming community will react to the presence of ads, and the second is whether the revenue generated will be sufficient to sustain the model over the long term.
The move toward ad‑supported streaming appears to be a calculated risk taken by Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with bold ideas. Whether this gamble pays off remains to be seen. Historically, many gaming‑related ad campaigns have relied on a "watch an ad, earn an extra life" mechanic.
Xbox’s proposal is different: it asks players to watch an advertisement to access a game they already own. Our existing data set does not yet reveal how this particular exchange will be received. Related research on ad‑format perception shows that when participants recall an ad, they often describe the format as "non‑intrusive" and "immersive," two descriptors that consistently rank highly. If Xbox—and potentially other platforms in the future—wish to make advertising a staple of gaming, they will need to keep these attributes front and center.
My forecast is that Xbox will neither be the first nor the last company to experiment with this model. Advertising has been part of video games for years, but it has rarely been implemented with the player’s experience as the primary focus. Should Xbox manage to strike the right balance, it could pave the way for similar strategies across the industry, ultimately making video games more affordable and accessible for the everyday gamer.