Virginie Chesnais serves as the chief marketing officer at Happydemics, an ad‑technology analytics firm. For years, many gamers have been skeptical about advertisements that appear within games, and their concerns are not unfounded. In‑game ads have earned a mixed reputation because they often redirect users to external sites or apps, present misleading content, or feature hard‑to‑find close buttons, leading to frustration and a sense of intrusion. A recent study by eMarketer highlighted that 52 % of respondents would abandon a game after encountering several disruptive ad elements.
Losing half of your audience at the moment you are trying to engage them is hardly an effective approach. However, advertisements do not have to be a nuisance. The same research revealed that one in five gamers would actually increase the frequency with which they play a title 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 in the console ecosystem. The argument for introducing a modest ad‑for‑games model is more compelling than many assume, as it has already been demonstrated in linear media. Platforms such as Netflix, Disney+ and other streaming services have shown that a hybrid model—offering both ad‑free and ad‑supported tiers—can generate substantial revenue while expanding the audience. Should Xbox’s experiment succeed, it would not only preserve its subscription base but also unlock a fresh, previously untapped stream of income at a moment when the brand is seeking new financial footholds.
This is significant because console gaming is increasingly being positioned as a premium experience. The price tags attached to new games, consoles, accessories and downloadable content are steadily rising, creating a financial barrier for the average player. Xbox itself has stated that, when executed correctly, advertising can reduce the cost of entry to gaming. The mobile‑gaming sector already provides evidence that ad‑supported tiers can invite newcomers who might otherwise be deterred by high upfront costs.
Crucially, participation would be entirely optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those who are comfortable with occasional ads could enjoy a lower‑cost alternative.
By offering a two‑tier system, Xbox hopes to retain its dedicated fan base while simultaneously widening its reach to new users. Although no formal survey data on this specific rollout exists 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 playtime on a favorite or newly released title. Xbox’s internal analytics are likely to confirm this intuition.
Happydemics’ data from 285 in‑game campaigns across the United Kingdom and North America indicate that in‑game advertising consistently outperforms television, social media, and other online formats in terms of ad 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.
Xbox’s “around‑the‑game” strategy—showing ads before the gameplay begins rather than embedding them within the game world—adds another layer of advantage. Our research shows that pre‑game placements generate higher recall and attribution scores compared with intrinsic in‑game placements. This distinction matters because, while we can often remember ads that flash on a TV screen or appear in a social feed, we do not always connect those impressions to a specific brand.
Gaming appears to occupy a unique position in the advertising landscape, delivering stronger brand‑linkage metrics. This is likely why companies such as Xbox and EA are increasingly exploring ad‑based models for their products.
It is essential to note that Xbox’s ads are not embedded within the gameplay itself; they appear before the session starts. Traditional in‑game formats tend to excel further down the funnel, delivering stronger lifts in brand image, consideration, interest, and likeability.
A hybrid approach that combines pre‑game and in‑game ads could theoretically provide advertisers with the best of both worlds, though it might also provoke greater pushback from players who value an uninterrupted experience. Xbox has pledged that any advertisements will be non‑intrusive. By placing ads prior to the game launch, the company aims to preserve the immersive nature of the experience. This approach benefits both gamers—who avoid interruptions during play—and advertisers, who want their messages to be part of the experience rather than a disruptive annoyance.
Relevance will be another key factor. No player wants to see a commercial for cat food when they do not own a cat, or an ad for a game they have already completed. Contextual, targeted ads that make sense for the individual user will help keep viewers engaged and prevent them from abandoning the session at the first sign of irrelevant content.
Nonetheless, Xbox is venturing into largely uncharted territory. The first unknown is how gamers will react to pre‑game advertising; the second is whether the revenue generated will be sufficient to sustain the model over the long term.
The move toward ad‑supported game streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has shown a willingness to experiment with new business models. Whether this gamble pays off remains to be seen.
Historically, many gaming ad campaigns have followed a “watch an ad, earn an extra life” formula. Xbox’s proposal differs: players would watch an ad to access a game they already own, rather than to earn a reward. Our current data set does not yet reveal how this will be received. However, broader research on ad format perception indicates that descriptors such as “non‑intrusive” and “immersive” rank among the most positively viewed attributes.
If Xbox—and potentially other platforms in the future—aim to make gaming ads successful, they will need to focus closely on these two dimensions. In my view, Xbox is unlikely to be the first nor the last company to test this model. Advertising in games has existed for years, but it has often been implemented without the player’s experience as a primary consideration. Should Xbox manage to strike the right balance, it could pave the way for similar initiatives across the industry and make video games more financially accessible to everyday gamers.