Virginie Chesnais serves as chief marketing officer at Happydemics, an analytics platform that focuses on advertising technology. For many years, gamers have looked at in‑game advertising with suspicion, and that wariness is not without cause. The reputation of ads in video games is mixed at best; players often encounter redirects to unrelated websites or apps, misleading creative, and dismissive close buttons that are difficult to locate. Such experiences can quickly sour a player’s enjoyment.
A recent study conducted by eMarketer highlighted the severity of the problem: 52 percent of respondents said they would stop playing a title if they ran into multiple disruptive advertising elements. Losing more than half of an audience at the very moment you are trying to engage them is hardly a winning strategy. However, the same research also revealed a silver lining—one in five gamers indicated they would actually play a game more often if the in‑game advertisements were of high quality and relevance.
This insight arrives at a time when Xbox is experimenting with a new ad‑supported game‑streaming service, and the overall cost of gaming continues to climb. High‑caliber ads could therefore find a natural home within the gaming ecosystem. The concept of offering an "ads‑for‑games" model is not new; linear media have already demonstrated its viability. Streaming giants such as Netflix and Disney+ have built profitable ad‑supported tiers alongside their premium subscriptions.
If Xbox can replicate that success, it would not only preserve its existing paying subscriber base but also unlock a fresh revenue stream—something the brand desperately needs as competition intensifies. The relevance of this shift becomes clearer when we consider that console gaming is increasingly positioned as a premium service.
Prices for hardware, software, accessories, and downloadable content have risen steadily, making it harder for the average consumer to justify the expense. Xbox itself has acknowledged that, when executed correctly, advertising can lower the barrier to entry for gamers. Mobile gaming already provides a proof point: ad‑supported tiers allow players to experience games without paying large upfront fees, expanding the market to those who might otherwise stay away.
Crucially, the proposed system 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 break could enjoy a reduced cost of access.
This two‑tier approach aims to keep loyal fans happy while simultaneously attracting newcomers who are price‑sensitive. Although we lack concrete survey data on Xbox's latest announcement, it is reasonable to assume that a large majority of gamers would tolerate a thirty‑second advertisement if it meant gaining an hour of gameplay in a beloved or new title.
Happydemics' own data, drawn from 285 in‑game campaigns across the UK and North America, consistently shows that in‑game ads outperform traditional TV, social, and online placements in terms of recall and accurate brand attribution. Players are more likely to remember an ad they saw while playing a game than one they saw while scrolling through a feed. Xbox's "around‑the‑game" strategy—delivering ads before the game starts rather than embedding them within the gameplay—adds another layer of interest. Our research indicates that pre‑game formats generate higher recall and attribution scores compared with intrinsic in‑game placements.
This distinction matters because while viewers may recall a television commercial, they often struggle to connect it to the sponsoring brand. Gaming, by contrast, appears to create a stronger mental link between the ad and the advertiser, which explains why companies like EA and Xbox are increasingly exploring ad‑based models. It is important to note that Xbox's ads will not interrupt the actual gameplay.
By positioning commercials before the game launches, the immersive experience remains intact, a factor that benefits both players and advertisers. Advertisers want their messages to be part of the experience, not a jarring interruption, and players are more likely to accept ads that do not break their focus.
Relevance is another key ingredient. No gamer wants to see an advertisement for cat food when they do not own a cat, or for a game they have already completed. Contextual, targeted ads that align with a player’s interests will reduce the likelihood of users abandoning the session at the first sign of a commercial. This relevance also maximizes the value for brands, giving them a more effective platform to reach new audiences.
Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to pre‑game advertising; the second is whether the revenue generated will be sufficient to sustain the model over the long term. Xbox CEO Asha Sharma’s decision to explore ad‑supported streaming demonstrates a willingness to take calculated risks, but only time will reveal whether the approach pays off. Historically, many gaming ad models have relied on a "watch an ad, earn an extra life" mechanic, offering a direct gameplay reward in exchange for ad exposure.
Xbox’s proposal differs: it asks players to watch an ad to access a game they already own, without any additional in‑game benefit. Our existing data set does not yet indicate how this will be perceived, but related research on ad format perception shows that descriptors such as "non‑intrusive" and "immersive" are among the most positively received.
If Xbox can deliver ads that feel seamless and enhance rather than disrupt the experience, it will likely meet the expectations of both gamers and advertisers. Looking ahead, I anticipate that Xbox will not be the sole experimenter in this space.
Advertising within video games has existed for years, but it has rarely been implemented with the player’s convenience as the primary focus. Should Xbox succeed, it could pave the way for other publishers to adopt similar models, ultimately making video games more affordable and accessible for everyday players while opening new monetisation avenues for the industry.