Virginie Chesnais serves as chief marketing officer at the ad‑tech analytics firm Happydemics. While gamers have traditionally been skeptical of advertisements embedded in games, their concerns are not unfounded.
In‑game ads have earned a mixed reputation, often because they redirect users to unrelated sites or apps, feature misleading content, or hide the close button in a way that frustrates players. A recent study conducted by eMarketer highlighted that 52 % of respondents would abandon a game if they encountered multiple intrusive ad elements.
Losing half of an audience at the very moment you try to engage them is hardly an effective approach. However, the same research also revealed a more optimistic side: one in five gamers indicated they would play a title more often if the advertisements were high‑quality and well integrated.
This insight arrives at a time when Xbox is experimenting with an 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 argument for a hybrid ad‑for‑games model is stronger than many anticipate, and it has already been partially validated by 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 substantial revenue while expanding the audience base. Should Xbox’s experiment prove profitable, it would not only preserve its existing subscription base but also unlock a previously untapped stream of income—a crucial development for a brand that is currently seeking new growth avenues. The relevance of this shift is underscored by the fact that console gaming is increasingly positioned as a premium experience.
Prices for games, consoles, accessories, and downloadable content have risen sharply, creating a financial barrier for the average consumer. Xbox itself has acknowledged that, when executed correctly, advertising can lower the cost of entry for gamers.
Mobile gaming already offers a clear precedent: ad‑supported tiers enable players to engage with titles without paying large upfront fees, thereby broadening the market. Importantly, any advertising model Xbox adopts will be optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads. 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 specific survey data on the current announcement, it is reasonable to assume that most gamers would tolerate a short, 30‑second commercial if it granted them an hour of gameplay in a beloved or new title. Xbox likely has internal data supporting this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America reveals that in‑game advertisements consistently outperform television, social media, and other online formats 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. Xbox’s "around‑the‑game" strategy—showing ads before the game launches rather than within the gameplay itself—adds another layer to this picture. Our data indicate that pre‑game placements generate higher recall and attribution rates compared with intrinsic in‑game spots. This distinction matters because, while viewers can recall ads seen on TV or social feeds, they do not always link those impressions to the correct brand.
Gaming, by contrast, appears to excel at creating a clear mental connection between the ad and its source, which may explain why companies like EA and Xbox are increasingly exploring ad‑based models. It is crucial to note that Xbox’s ads will be pre‑game, not embedded within the gameplay. In‑game ad formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and likeability.
A combined approach—leveraging both pre‑game and in‑game placements—could provide advertisers with a comprehensive toolkit, though it also risks provoking greater resistance from players. Xbox has pledged that its advertisements will be non‑intrusive. By positioning ads before the gaming session begins, the company hopes to preserve the immersive experience that gamers value.
This approach benefits both players, who avoid interruptions during play, and advertisers, who want their messages to enhance rather than detract from the overall experience. Relevance is another key factor.
No gamer wants to see an ad for cat food when they don’t own a cat, or an advertisement for a game they have already completed. By delivering contextually appropriate ads—perhaps based on player interests, recent purchases, or genre preferences—Xbox can keep users engaged while offering brands a highly targeted platform. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how players will react to the presence of ads at all; the second is whether the revenue generated will be sufficient to sustain the model over the long term. The decision to explore ad‑supported streaming reflects a willingness by Xbox CEO Asha Sharma to experiment and take calculated risks.
Only time will reveal whether this gamble pays off. Historically, many gaming ad models have been built around "watch an ad, earn an extra life" mechanics. Xbox’s proposal is different: it asks players to watch an ad to access a game they already own.
Our existing data set does not yet indicate how this will be received. However, broader research on ad‑format perception shows that when respondents are asked to describe ads they remember, terms like "non‑intrusive" and "immersive" frequently emerge as positive descriptors. If Xbox—and potentially other platforms in the future—aim to make advertising a sustainable part of gaming, these two qualities will be essential metrics to monitor. In my view, Xbox will neither be the first nor the last company to test this approach.
Advertising has long existed in gaming, but often without the player’s experience as a central consideration. Should Xbox succeed in delivering ads that feel seamless and optional, it could pave the way for other developers and publishers to adopt similar models, ultimately making video games more affordable and accessible for everyday gamers.