Virginie Chesnais serves as the chief marketing officer at Happydemics, an analytics platform that focuses on advertising technology. For many years, 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 frequently encounter redirects to unrelated websites or apps, misleading creative, and dismissible close buttons that are hard to locate, all of which contribute to a frustrating experience. A recent study by eMarketer highlighted that 52 % of gamers would abandon a session if they ran into several intrusive ad elements.
Losing half of the audience at the moment you are trying to engage them is hardly an effective tactic. However, the same research also revealed a more optimistic side: one in five players said they would actually play a game more often if the advertisements embedded within it were of a high standard. This paradox suggests that, when executed correctly, advertising can coexist with enjoyable gameplay.
Xbox is currently piloting an ad‑supported game‑streaming service at a time when the overall cost of gaming is climbing steadily. If the ads are crafted with quality and relevance in mind, they could find a natural home in the gaming ecosystem. The argument for a hybrid "ads‑for‑games" model is stronger than many anticipate, especially when we look at the success of linear media platforms. Services such as Netflix, Disney+, and other on‑demand video providers have demonstrated that offering both subscription‑only and ad‑supported tiers can generate substantial revenue while expanding the audience base.
Should Xbox’s experiment prove viable, it would not only preserve revenue from existing subscribers but also unlock a fresh, previously untapped income stream—something the brand could greatly benefit from given its current financial pressures. Console gaming is increasingly being positioned as a premium product.
The price tags attached to new consoles, flagship titles, accessories, and downloadable content are rising, creating a financial barrier for the average consumer. Xbox itself has acknowledged that, when handled responsibly, advertising can lower the cost of entry for gamers.
The mobile gaming sector already offers a clear precedent: ad‑supported versions of popular titles let players dive in without paying large upfront fees, often in exchange for short commercial breaks. Importantly, Xbox’s approach remains optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads altogether.
By offering a two‑tier system—ad‑supported and ad‑free—Xbox hopes to retain its loyal fan base while simultaneously making games more approachable for newcomers who might otherwise be deterred by high price points. While there is no published survey data on this specific rollout yet, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second advertisement if it granted them an hour of gameplay on a beloved or newly released title. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that advertisements delivered within games consistently outperform TV, social, and standard online placements 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.
Xbox’s “around‑the‑game” strategy—showing ads before a session begins rather than embedding them directly into the gameplay—adds another layer of intrigue. Our data indicate that pre‑game formats achieve higher recall and attribution scores compared with in‑game placements that appear mid‑play. This distinction matters because, although we can often recall ads encountered while watching television or scrolling through social feeds, we do not always link those impressions to the correct brand. Gaming appears to occupy a unique niche where ad recall translates more directly into brand awareness, which likely explains why companies like Xbox and Electronic Arts are increasingly exploring ad‑based monetisation models.
It is essential to note that Xbox’s ads will be pre‑game, not intrusive mid‑game interruptions. In‑game ad formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and overall likability. A blend of pre‑game and in‑game advertising could theoretically give marketers the best of both worlds, though it would also raise the risk of player pushback. Xbox has pledged that any advertisements will be non‑intrusive, a claim that makes sense when ads are shown before the game starts, preserving the immersive experience once play begins.
This approach benefits both the gamer—who enjoys an uninterrupted session—and the advertiser, who wants their message to be part of the experience rather than a disruption. Relevance will be another critical factor. No one wants to see a commercial for cat food when they don’t own a cat, or a promotion for a game they have already completed.
By delivering contextual, targeted ads that align with a player’s interests, Xbox can keep viewers engaged and prevent them from exiting at the first sign of an irrelevant spot, while simultaneously providing brands with a premium platform to reach new audiences. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how players will truly react to a regular stream of pre‑game ads; 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 the boldness of Xbox CEO Asha Sharma, who has shown a willingness to experiment and take calculated risks. Only time will reveal whether this gamble pays off. Historically, many gaming ad campaigns have relied on a "watch an ad, earn an extra life" mechanic.
Xbox’s proposal 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 tell us 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—can deliver ads that meet these expectations, they will likely succeed in balancing revenue generation with player satisfaction. In my view, Xbox will not be the first nor the last to test this model.
Advertising within games has existed for years, but it has often been implemented without the player’s experience as a priority. Should Xbox manage to integrate ads in a way that feels seamless and optional, it could pave the way for other publishers to follow suit, ultimately making video games more affordable and accessible for everyday gamers.