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 their wariness is understandable. The reputation of ads in video games is mixed at best; players often encounter redirects to unrelated sites or apps, misleading content, and dismiss buttons that are hard to locate, all of which generate frustration. A recent study conducted by eMarketer highlighted that 52 % of gamers would abandon a session if they ran into several intrusive ad elements.
Losing half of an audience at the moment you are trying to engage them is hardly an effective approach. However, 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 play a title if the advertisements were of a high quality and felt relevant. 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 ads to find a welcoming niche within the gaming ecosystem.
The concept of offering an "ads‑for‑games" model is more appealing than many might assume, as it has already been partially validated by the success of linear media platforms. Services such as Netflix, Disney+, and other streaming giants have demonstrated that a hybrid model—providing both ad‑free and ad‑supported tiers—can generate substantial revenue while keeping a broad user base satisfied.
Should Xbox’s experiment prove successful, it could not only preserve its paying subscriber base but also unlock a completely new revenue stream at a moment when the company is seeking fresh sources of income. This development matters because console gaming is increasingly being positioned as a premium offering. Prices for new games, consoles, accessories, and downloadable content (DLC) are all on an upward trajectory, making it harder for the average consumer to justify the expense. As Xbox itself noted in its announcement, when executed correctly, advertising can lower the barrier to entry and make gaming more affordable.
Mobile gaming has already shown that ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases, allowing them to enjoy a game in exchange for viewing short advertisements. Crucially, participation in an ad‑supported tier would be optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those who are comfortable with occasional ads could choose a lower‑cost entry point.
By offering a two‑tier system, Xbox aims to retain its loyal fan base while simultaneously expanding accessibility for newcomers. Although there is currently no specific survey data on Xbox’s new approach, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second advertisement if it meant they could play a favorite title or a brand‑new game for an hour without paying the full price. Xbox likely has internal data that supports this hypothesis.
Happydemics has analyzed 285 in‑game campaigns across the United Kingdom and North America, finding that in‑game advertisements consistently outperform television, social media, and other online formats when it comes to ad recall and attribution. In other words, players are more likely to remember an ad they see while gaming and to correctly associate it with the brand that displayed it. This advantage becomes even more pronounced when ads are placed "around the game"—for example, before the game loads—rather than embedded directly within gameplay.
Our data show that these pre‑game formats generate higher recall and attribution scores compared with intrinsic in‑game placements. The distinction is important because while we can often recall ads that appear on TV or in a social feed, we do not always link those impressions to the specific brands behind them.
Gaming appears to be in a league of its own regarding this metric, which explains why companies like Xbox and EA are increasingly exploring ad‑based models. It is worth noting, however, that Xbox’s ads are intended to appear before the game starts, not during the gameplay itself.
Traditional in‑game ad formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and overall likability. A hybrid approach that combines both pre‑game and in‑game ads could offer advertisers the best of both worlds, though it might also provoke more resistance from players who value an uninterrupted experience. Xbox has pledged that any advertisements will be non‑intrusive. By positioning ads before the actual gameplay, the company hopes to avoid breaking immersion.
This approach benefits both players—who retain a seamless experience—and advertisers, who want their messages to be part of the overall journey rather than a disruptive interruption. Relevance will be another key factor. Nobody wants to see a commercial for cat food when they don’t own a cat, or an ad for a game they have already completed. By delivering contextual, targeted ads that make sense for each individual player, Xbox can keep users from abandoning the session while providing brands with a highly effective platform to reach new audiences.
Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how gamers will react to pre‑game advertising, and the second is whether the revenue generated will be sufficient to sustain the model over the long term. The move to explore ad‑supported game streaming reflects a bold strategy by Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment and take calculated risks. Only time will reveal whether this gamble pays off.
Historically, many of our gaming‑ad projects have relied on a "watch an ad, earn an extra life" mechanic. Xbox, by contrast, is asking players to watch an ad simply to access a game they already own. Our existing data set does not yet indicate how this will be received. However, broader research on ad‑format perception shows that descriptors such as "non‑intrusive" and "immersive" rank among the most positively viewed attributes.
If Xbox—and potentially other platforms in the future—are to make advertising a staple of gaming, these two qualities will need to be carefully monitored. In my view, Xbox will neither be the first nor the last company to test this kind of model. Advertising in games is not a new concept, but it has rarely been implemented with the player’s experience as the primary focus.
Should Xbox succeed, it could pave the way for similar initiatives across the industry, ultimately making video games more affordable and accessible for everyday gamers.