Virginie Chesnais serves as Chief Marketing Officer at the ad‑technology analytics firm Happydemics. For years, many gamers have looked at 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, deceptive messaging, or dismissible close buttons that are hard to locate, all of which lead to frustration. A recent study by eMarketer highlighted that 52 % of respondents would stop playing a title if they ran into several intrusive ad elements. Losing half of an audience at the moment you’re trying to engage them is hardly a winning tactic. However, advertisements do not have to be a negative experience.
The same research revealed that one in five gamers would actually increase the frequency with which they play a game if the in‑game ads were of high quality and relevance. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming continuing to climb, well‑crafted ads could find a receptive home within the medium. The argument for a hybrid "ads‑for‑games" model is stronger than many assume, and it already has a precedent in linear media. Services such as Netflix, Disney+ and other streaming platforms have demonstrated that a tiered approach—offering both ad‑free and ad‑supported options—can generate significant revenue while expanding the audience base.
Should Xbox’s experiment succeed, it would not only preserve its paying subscriber base but also unlock a fresh, previously untapped source of income at a moment when the brand is eager for new cash flows. This is especially relevant because console gaming is increasingly being positioned as a premium service. Prices for games, consoles, accessories, and downloadable content have risen steadily, making it harder for the average consumer to justify the expense.
The result is a growing barrier that keeps many potential players on the sidelines. Xbox itself has stated that, when executed correctly, advertising can reduce the cost of entry for gamers. The mobile‑gaming sector already shows that ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases.
By offering a similar pathway, Xbox could broaden its reach. Crucially, participation would be optional.
Players who prefer an uninterrupted experience could continue to pay for a subscription that removes ads, while those who are price‑sensitive could opt into the ad‑supported tier. This two‑track system aims to keep the existing fan base happy while simultaneously inviting newcomers who might otherwise be deterred by high price tags. Although there is no concrete survey data on this specific launch yet, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second commercial if it granted them an hour of gameplay on a beloved or new title.
Xbox’s internal data likely supports that assumption. 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 when it comes to recall and attribution. Players are more likely to remember an ad they saw while gaming and to correctly associate it with the brand that delivered it.
Xbox’s “around‑the‑game” strategy—showing ads before the game loads rather than embedding them within the gameplay—adds another layer to this picture. Our data indicate that pre‑game placements generate stronger recall and attribution than ads placed directly inside the game environment. The distinction matters because, while we can often recall ads seen on TV or scrolling through feeds, those memories do not always translate into a clear brand connection. Gaming appears to occupy a unique niche where ad recall more readily leads to brand association, which explains why companies like Xbox and EA are increasingly exploring ad‑based models.
It is worth noting, however, that Xbox’s ads are not in‑game but pre‑game. Traditional in‑game formats tend to excel further down the funnel, delivering higher lifts in brand image, consideration, interest, and overall likability. A hybrid approach that combines both pre‑game and in‑game placements could theoretically offer advertisers the best of both worlds, though it also raises the risk of player pushback.
Xbox has pledged that the advertisements will be non‑intrusive. By placing ads before the actual gameplay begins, the company hopes to avoid disrupting the immersive experience that gamers value. This approach benefits both players—who retain a seamless session—and advertisers, who want their messages to be part of the experience rather than a nuisance. Relevance will be key.
No gamer wants to see an ad for cat food when they don’t own a cat, or a promotion for a game they have already completed. Contextual, well‑targeted ads that make sense in the moment will help keep players from abandoning the session, while giving brands a premium platform to reach new audiences. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how players will react to this new ad format; the second is whether the revenue generated will justify making it a permanent feature. The decision to explore ad‑supported streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has shown a willingness to experiment with unconventional strategies. Time will reveal whether the gamble pays off. Historically, many gaming ad campaigns have relied on the classic "watch an ad, earn an extra life" model.
Xbox’s proposal is different: it asks players to watch a commercial to unlock access to a game they already own. Our current data set does not yet indicate how this will be received.
Nevertheless, broader research on ad‑format perception suggests that descriptors such as "non‑intrusive" and "immersive" rank highly among positive responses. If Xbox—and potentially other platforms—aim to make advertising a sustainable component of gaming, these two attributes will be critical to monitor. In my view, Xbox will not be the first nor the last company to test this approach.
Advertising has been part of gaming for a long time, but often without the player’s experience at the forefront. Should Xbox succeed in delivering ads that feel natural, relevant, and unobtrusive, it could pave the way for similar initiatives across the industry and, more importantly, make video games more financially accessible for everyday gamers.