Virginie Chesnais serves as chief marketing officer at the ad‑technology analytics firm Happydemics. For many years, gamers have viewed in‑game advertising with suspicion, and that wariness is not unfounded. The reputation of ads in interactive entertainment is mixed; players often encounter redirects to unrelated websites or apps, misleading content, or dismiss buttons that are difficult to locate, leading to frustration and a sense of intrusion.
A recent study conducted by eMarketer highlighted that 52 percent of respondents would abandon a game if they were repeatedly exposed to disruptive advertising elements. Losing half of an audience at the moment you are trying to engage them is hardly an effective approach.
However, advertisements do not have to be detrimental. The same research revealed that one in five gamers would actually increase the frequency with which they played a title if the in‑game ads 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, well‑crafted advertisements could find a natural home within the ecosystem. The argument for a hybrid "ads‑for‑games" model is more compelling than many anticipate, and it draws on lessons learned from linear media.
Platforms such as Netflix, Disney+, and other on‑demand services have demonstrated that offering both ad‑free and ad‑supported tiers can generate significant revenue while preserving a steady subscriber base. Should Xbox’s experiment succeed, it would not only protect its existing paying customers but also unlock a previously untapped stream of income at a moment when the brand is seeking fresh financial avenues. This development matters because console gaming is increasingly positioning itself as a premium experience.
Prices for games, consoles, accessories, and downloadable content are steadily rising, making it harder for the average consumer to justify the expense. Xbox itself has acknowledged that, when executed correctly, advertising can lower the barrier to entry and make gaming more affordable for a broader audience. Mobile gaming has already proven that ad‑supported tiers can invite new players into the market without demanding a large upfront payment. Crucially, participation would be optional.
Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those willing to tolerate brief advertisements could enjoy a lower‑cost alternative. By offering a two‑tier system, Xbox aims to retain its loyal fan base while simultaneously expanding accessibility for newcomers. Although there is no specific survey data on this particular announcement, it is reasonable to assume that most gamers would accept a 30‑second commercial break if it granted them an hour of gameplay on a favorite or new title.
Xbox likely has internal metrics that support this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that in‑game ads consistently outperform television, social media, and other online formats when it comes to recall and attribution.
Players are more likely to remember an advertisement that appears within a gaming environment and correctly associate it with the sponsoring brand. The "around‑the‑game" strategy that Xbox is exploring—showing ads before the gameplay begins rather than embedding them within the game world—adds another layer to this picture. Our data indicate that pre‑game placements achieve higher recall and attribution rates compared with intrinsic in‑game spots. This distinction matters because, while traditional TV or social ads may be memorable, they do not always translate into clear brand connections.
Gaming appears to excel in this regard, which likely explains why companies such as Xbox and Electronic Arts are increasingly investigating ad‑based models. It is important to note that Xbox’s ads would be pre‑game, not in‑game. Intrinsic in‑game formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and likeability.
A combined approach—leveraging both pre‑game and in‑game advertisements—could offer advertisers a comprehensive solution, 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 before the game launches, the company aims to preserve the immersive quality of the gameplay itself.
This consideration benefits both the player, who remains undisturbed during the core experience, and the advertiser, who wants their message to complement rather than disrupt the session. Relevance will be another key factor. No one wants to see a promotion for cat food when they don’t own a cat, or an ad for a game they have already completed. Contextual, targeted ads that align with a player’s interests will help prevent users from abandoning the session at the sight of an irrelevant commercial, while also providing brands with a high‑impact platform to reach new audiences.
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 justify a long‑term commitment to the model.
The move toward ad‑supported streaming reflects a bold strategy by Xbox CEO Asha Sharma, who appears willing to experiment and take calculated risks. Time will reveal whether the approach delivers the intended results.
Historically, many gaming ad campaigns have employed a "watch an ad, earn an extra life" mechanic. Xbox’s proposition differs: players would watch an ad to access a game they already own, rather than to earn a reward. Our existing data set does not yet indicate how this will be received.
Related research on ad format perception shows that when participants recall an advertisement, they often describe the experience as "non‑intrusive" and "immersive"—the two most popular positive descriptors. If Xbox and future adopters wish to make advertising a sustainable component of gaming, they will need to prioritize these qualities. In my view, Xbox will not be the first nor the last platform to experiment with this hybrid model.
Advertising within games has existed for years, but it has rarely been designed with the player’s experience at the forefront. Should Xbox manage to strike the right balance, it could pave the way for other publishers to follow, ultimately making video games more affordable and accessible for everyday gamers.