Virginie Chesnais serves as chief marketing officer at Happydemics, a platform that specializes in ad‑tech analytics. For years, gamers have been skeptical about advertising that appears within games, and their concerns are understandable. The reputation of in‑game ads is mixed, often plagued by issues such as redirects to unrelated sites or apps, misleading creative, and hide‑away close buttons that frustrate users.
A recent study from eMarketer revealed that 52 % of players would abandon a session if they encountered several intrusive ad elements. Losing half of an audience at the moment you are trying to engage them is hardly an effective tactic. 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 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 with the overall cost of gaming steadily climbing, well‑crafted advertisements could find a welcoming niche within the medium. The argument for a modest "ads‑for‑games" model is stronger than many anticipate, a notion already demonstrated by linear media. Services like Netflix, Disney+, and other streaming platforms have proven that offering an ad‑supported tier alongside a premium subscription 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 at a moment when the brand is seeking additional financial footing. This is significant because console gaming is increasingly positioned as a premium product. The price tags on new consoles, full‑price games, accessories, and downloadable content have risen to levels that many casual players find hard to justify. These rising costs create a barrier that discourages newcomers and strains the wallets of regular gamers.
Xbox itself has stated that, when executed correctly, advertising can help lower the price of entry into gaming. 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 free or low‑cost entry point, advertisers subsidize the experience, making games more attainable. Crucially, this model would be entirely optional. Players who prefer an ad‑free environment could continue to pay a subscription fee for an uninterrupted experience.
By providing a two‑tier system—ad‑supported and premium—Xbox hopes to keep its loyal fan base while simultaneously attracting new users who might otherwise be priced out. Although there is no specific survey data on Xbox’s latest announcement, it is reasonable to assume that most gamers would tolerate a brief 30‑second commercial if it granted them an hour of playtime on a beloved or new title.
Xbox’s internal data likely supports this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that in‑game advertising consistently outperforms television, social media, and other online formats when it comes to ad recall and attribution. Players are more likely to remember an ad they saw while gaming and correctly associate it with the brand that served it. The distinction between "around‑the‑game" ads—those displayed before a session begins—and ads embedded within the gameplay itself is also important.
Our data indicate that pre‑game placements generate stronger recall and attribution metrics than intrinsic in‑game placements. This suggests that showing an ad during a natural pause (such as a loading screen) may be less disruptive while still delivering a memorable impression.
Why does this matter? While we can often recall ads we encounter on TV or scrolling through feeds, those memories do not always translate into clear brand associations.
Gaming appears to occupy a unique space where recall and brand linkage are tightly coupled, which likely explains why companies like Xbox and EA are exploring ad‑based monetisation models. It is essential to note that Xbox’s ads are planned to appear before gameplay, not during it.
In‑game ad formats tend to excel further down the conversion funnel, boosting brand‑image uplift, consideration, interest, and likability. A hybrid approach—combining pre‑game and in‑game ads—could theoretically give advertisers the best of both worlds, though it might also provoke greater resistance from players who value uninterrupted immersion. Xbox has pledged that its advertisements will be non‑intrusive. By placing ads before the game starts, the company aims to preserve the immersive experience that gamers cherish.
This approach benefits both the player, who isn’t interrupted mid‑session, and the advertiser, whose message is delivered in a context where it can be absorbed without causing frustration. Relevance will be another key factor.
Nobody wants to see an ad for cat food if they don’t own a cat, or a promotion for a game they have already completed. Contextual, targeted ads that make sense for the individual player will help keep the experience smooth and prevent users from abandoning the session at the sight of an irrelevant commercial.
Nevertheless, Xbox is navigating uncharted waters. The first unknown is how the community 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 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 new business models. Only time will reveal whether this strategy delivers the intended results.
Historically, many gaming ad programs have relied on a "watch an ad, get an extra life" premise. Xbox’s proposal, however, asks players to watch an ad to access a game they already own—a shift that our existing data set does not directly address. Research on ad‑format perception does offer some guidance. When participants who remembered an ad were asked to describe the format, terms such as "non‑intrusive" and "immersive" ranked among the most positive descriptors.
If Xbox and future adopters wish to make advertising a lasting component of gaming, focusing on these two qualities will be essential. My forecast is that Xbox will neither be the first nor the last platform to test this approach.
Advertising in games has existed for decades, but it has rarely been designed with the player’s experience at its core. Should Xbox succeed in delivering ads that feel natural, relevant, and unobtrusive, it could pave the way for other developers and publishers to follow suit, ultimately making video games more affordable and accessible for the everyday gamer.