Virginie Chesnais serves as chief marketing officer at the ad‑tech analytics firm Happydemics. For many years, gamers have viewed in‑game advertising with suspicion, and that wariness is understandable. The reputation of ads in video games is mixed at best, often marred by redirects to unrelated sites or apps, misleading creative, and close buttons that are difficult to locate—frustrations that can quickly sour a player’s experience. A recent study from eMarketer highlighted the severity of the problem: 52 % of respondents said they would stop playing a title if they encountered multiple intrusive ad elements.
Losing more than half of an audience at the very moment you try to engage them is hardly an effective strategy. Nevertheless, advertising does not have to be a negative force.
The same research revealed that one in five gamers would actually increase the frequency with which they played a game if the advertisements were of high quality and well integrated. This suggests that, when executed correctly, ads can enhance rather than detract from the gaming experience.
Xbox is currently piloting an ad‑supported game‑streaming service, and the broader cost of gaming—rising prices for consoles, titles, accessories, and downloadable content—has created a financial barrier for many casual players. In this climate, well‑crafted advertisements could find a receptive home within the medium.
The rationale for a gaming‑focused ad model is supported by trends in linear media. Services such as Netflix, Disney+, and other streaming platforms have demonstrated that offering both ad‑free and ad‑supported tiers can generate significant revenue while expanding the audience base. If Xbox’s experiment proves profitable, it could preserve its subscription‑based revenue stream and unlock a fresh, previously untapped source of income—a development the company could certainly use given the current market pressures. The importance of this shift lies in the fact that console gaming is increasingly being positioned as a premium product.
The cumulative cost of a console, the games that run on it, peripheral accessories, and ongoing downloadable content is becoming harder for the average consumer to justify. This price escalation erects a barrier that keeps many potential players on the sidelines.
Xbox itself has argued that, when handled responsibly, advertising can lower the cost of entry to gaming. Mobile gaming already offers a clear precedent: ad‑supported tiers allow players to experience games without paying large upfront fees, opening the market to a broader demographic.
Crucially, any ad model Xbox adopts will be optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads, while those willing to tolerate a short commercial break can enjoy a reduced‑cost or even free access path. By providing a two‑tier system, Xbox aims to keep its loyal fan base satisfied while simultaneously attracting newcomers who might otherwise be deterred by price.
Although there is no specific survey data on Xbox’s new approach yet, it is reasonable to assume that most gamers would tolerate a 30‑second advertisement if it meant they could play a beloved title—or a brand‑new release—for an additional hour. Happydemics’ own data, drawn from 285 in‑game campaigns across the UK and North America, show that in‑game ads consistently outperform television, social, and other online formats when it comes to recall and accurate brand attribution. Xbox’s “around‑the‑game” strategy—showing ads before a session begins rather than embedding them within the gameplay itself—adds another layer of appeal. Our research indicates that pre‑game placements generate higher recall and attribution scores than ads that appear directly inside the game world.
This distinction matters because, while we can often remember a commercial we saw on TV or while scrolling through a feed, we don’t always link that memory to the brand that aired it. Gaming appears to bridge that gap, delivering a stronger connection between ad exposure and brand recognition. This is likely why companies such as EA and Xbox are increasingly exploring ad‑based monetisation models. It is worth noting that Xbox’s ads will not be intrusive in‑game; they will appear before the game loads.
Pre‑game ads avoid breaking immersion, which benefits both the player—who can stay focused on the experience once the game starts—and the advertiser, who wants the campaign to feel like a natural part of the journey rather than a disruption. Relevance will be key.
No gamer 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, well‑targeted ads, Xbox can keep players from abandoning a session at the first sign of an irrelevant commercial, while simultaneously providing brands with a high‑impact platform to reach a highly engaged audience. Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to a pre‑game ad model; the second is whether the revenue generated will be sufficient to sustain the approach over the long term.
The decision to experiment with ad‑supported streaming reflects the boldness of Xbox CEO Asha Sharma, who has shown a willingness to take calculated risks. Historically, many gaming ad programs have relied on “watch an ad, get an extra life” mechanics—simple, short‑term incentives that reward the player directly. Xbox’s proposition is different: it asks players to watch an ad in order to access a game they already own. Our existing data set does not yet reveal how this particular trade‑off will be received.
However, broader research on ad format perception suggests that non‑intrusive and immersive experiences are the most positively received. If Xbox—and eventually other platforms—can deliver ads that feel seamless and respect the player’s time, those two metrics will likely become the benchmarks for success. In my view, Xbox will not be the first nor the last company to test this model. Advertising in games has existed for years, but often without the player’s best interests at the forefront.
Should Xbox manage to strike the right balance, it could pave the way for similar initiatives across the industry, ultimately making video games more affordable and accessible for everyday gamers.