Virginie Chesnais serves as chief marketing officer at the ad‑technology analytics firm Happydemics. For many years, gamers have approached in‑game advertising with suspicion, and that wariness is not unfounded. The reputation of ads in video games is mixed at best, as players often encounter redirects to unrelated websites or apps, misleading content, or dismiss buttons that are hard to locate—issues that breed frustration.
A recent study conducted by eMarketers revealed that 52 % of respondents would stop playing a title if they were repeatedly interrupted by intrusive ads. Losing half of your audience at the very moment you are trying to engage them is hardly an effective approach. Nevertheless, advertising does not have to be a negative experience.
The same research indicated that one in five gamers would actually increase the frequency with which they played a game if the ads presented 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, there is a genuine opportunity for well‑crafted advertisements to find a comfortable niche within the gaming ecosystem. The rationale for introducing an ad‑for‑games model is more compelling than many assume, and it has already been demonstrated to some extent by linear media platforms.
Services such as Netflix, Disney+, and other streaming giants have proven that a hybrid model—offering both ad‑free subscriptions and lower‑cost, ad‑supported tiers—can generate substantial revenue while expanding the audience base. Should Xbox’s experiment succeed, it would not only preserve its existing subscriber base but also unlock a previously untapped stream of income at a moment when the brand is seeking fresh financial sources. This development matters because console gaming is increasingly being positioned as a premium offering.
Prices for games, consoles, peripherals, and downloadable content are rising steadily, creating a financial barrier for the average player. Xbox itself has stated that, when executed correctly, advertising can help lower the barrier to entry for gamers.
The mobile gaming sector already offers a clear precedent: ad‑supported tiers enable players to engage with games without making large upfront purchases, thereby widening the market. Importantly, the model remains optional.
Players who prefer an uninterrupted experience can continue to pay for a subscription that removes ads, while those who are comfortable with occasional commercials can enjoy a reduced‑price option. By providing a two‑tier system, Xbox aims to keep its loyal community satisfied while simultaneously making games more approachable for newcomers. Although concrete survey data on this specific initiative is not yet available, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second advertisement if it granted them an hour of playtime on a favorite title or a brand‑new release. Xbox’s own analytics are likely to confirm this hypothesis.
Happydemics data drawn from 285 in‑game campaigns across the United Kingdom and North America demonstrate that in‑game advertisements consistently outperform 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 sponsoring brand. This is where Xbox’s “around‑the‑game” strategy—showing ads before the gameplay begins rather than embedding them within the game world—becomes intriguing.
Our research indicates that pre‑game placements generate higher recall and attribution scores compared with intrinsic in‑game placements. The significance lies in the fact that while we may recall ads seen on TV or scrolling through a feed, those memories do not always translate into a clear brand connection. Gaming appears to occupy a unique position in this regard, which likely explains why companies such as Xbox and EA are increasingly exploring ad‑based revenue models. It is crucial to note, however, that Xbox’s ads are not intended to interrupt the actual gameplay; they will appear before the game launches.
In‑game ad formats tend to excel later in the marketing funnel, delivering stronger lifts in brand image, consideration, interest, and likability. A combined approach—leveraging both pre‑game and in‑game ads—could theoretically offer advertisers the best of both worlds, though it may also provoke greater resistance from players. Xbox has promised that the advertisements will be non‑intrusive.
By placing them prior to the start of the session, the company aims to preserve the immersive experience that gamers cherish. This consideration benefits both the player, who avoids disruption, and the advertiser, whose message is delivered in a context that feels integrated rather than jarring.
Relevance will be another key factor. Nobody enjoys being shown an ad for cat food when they don’t own a cat, or for a game they have already completed. By ensuring that ads are contextual—targeted based on player interests, location, or recent activity—Xbox can minimize the risk of users abandoning a session at the sight of an irrelevant spot.
At the same time, brands gain access to a highly engaged audience that is primed for discovery. Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how gamers will react to a regular stream of pre‑game commercials; the second is whether the revenue generated will be sufficient to justify a long‑term commitment to the model.
The decision to explore ad‑supported game streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with new business models. Only time will reveal whether this gamble pays off.
Historically, our work in gaming advertising has focused on “watch an ad, earn an extra life” mechanics, where the reward is a tangible in‑game benefit. Xbox’s proposition differs: players would watch an ad to gain access to a game they already own, rather than receiving an extra life or bonus.
Our existing data set does not yet provide insight into how this particular exchange will be received. However, broader research on ad‑format perception shows that descriptors such as “non‑intrusive” and “immersive” consistently rank among the most favorable. If Xbox—and potentially other platforms in the future—wish to make gaming ads a sustainable component of their revenue mix, they will need to prioritize these qualities.
My forecast is that Xbox will neither be the first nor the last major console maker to trial this approach. Advertising in games has existed for many years, but it has rarely been designed with the player’s experience as the primary focus. Should Xbox succeed in delivering ads that feel seamless, relevant, and optional, it could pave the way for similar initiatives across the industry, ultimately making video games more affordable and accessible for everyday players.