Virginie Chesnais serves as the chief marketing officer at Happydemics, an analytics platform that focuses on advertising technology. For many years, gamers have approached in‑game advertising with a healthy dose of skepticism, and the wariness is understandable. The reputation of ads inside games is mixed at best; players often encounter redirects to unrelated websites or apps, misleading content, and close buttons that are difficult to locate, all of which generate frustration.
A recent study conducted by eMarketer highlighted that 52 % of respondents would abandon a game if they were bombarded with multiple intrusive ad elements. Losing more than half of an audience the moment you try to engage them is hardly an effective approach.
However, the same research also revealed a more optimistic side: one in five gamers said they would play a title more often if the in‑game advertisements were of high quality and well‑integrated. This insight arrives at a moment when Xbox is piloting a new ad‑supported game‑streaming service, and the overall cost of gaming continues to climb.
High‑quality, non‑intrusive ads could therefore find a natural home within the gaming ecosystem. The argument for incorporating an ad‑based model into video games is stronger than many assume, and it has already been demonstrated in the world of linear media. Services such as Netflix, Disney+, and other streaming platforms have proven that offering both ad‑free and ad‑supported tiers can generate substantial revenue while expanding the audience base.
Should Xbox’s experiment prove successful, it would not only preserve the existing subscriber pool but also unlock a fresh, previously untapped source of income—a boon the brand needs at this juncture. The relevance of this development is amplified by the fact that console gaming is increasingly positioned as a premium experience. Prices for games, consoles, accessories, and downloadable content (DLC) are rising steadily, creating a financial barrier for the average player.
Xbox itself has stated that, when executed correctly, advertising can lower the cost of entry to gaming. Mobile gaming already offers a precedent: ad‑supported tiers enable users to engage with games without paying large upfront fees, thereby widening the market. Crucially, the proposed system would be optional.
Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those willing to tolerate short commercial breaks could access the same content at a reduced price. By providing a two‑tiered model, Xbox aims to retain its loyal fan base while simultaneously inviting newcomers who might otherwise be deterred by price. Although no formal survey data exists yet on the specific Xbox announcement, it is reasonable to assume that most gamers would accept a 30‑second advertisement if it meant they could enjoy an hour of gameplay in a beloved or new title.
Happydemics’ own data, derived from 285 in‑game campaigns across the United Kingdom and North America, indicate that in‑game advertisements consistently outperform traditional TV, social, and online ads in terms of recall and accurate brand attribution. The distinction between "in‑game" and "around‑the‑game" placements is important. Xbox plans to use pre‑game ads—commercials that appear before the game launches—rather than embedding ads directly within the gameplay itself. Our research shows that these around‑the‑game formats achieve higher recall and attribution rates compared with intrinsic in‑game placements.
This suggests that gamers are more likely to remember a brand when the ad is presented as a brief, separate experience rather than as an interruption during play. Why does this matter?
While viewers can recall ads seen on television or scrolling through social media feeds, they do not always link those impressions to the correct brand. Gaming appears to operate in its own league when it comes to connecting ad exposure with brand memory, which may explain why companies such as Xbox and Electronic Arts are increasingly exploring ad‑based monetization models. It is also worth noting that in‑game ad formats tend to excel further down the marketing funnel, delivering stronger lifts in brand image, consideration, interest, and overall likability. A hybrid approach—combining pre‑game ads that respect the immersive experience with carefully curated in‑game placements—could theoretically provide advertisers with the best of both worlds.
However, this strategy also risks heightened pushback from players who are sensitive to any perceived intrusion. Xbox has emphasized that its advertisements will be non‑intrusive.
By placing commercials before the gameplay begins, the company aims to preserve the uninterrupted, immersive nature of the gaming session. This design benefits both players, who avoid disruption during play, and advertisers, who gain a captive audience that is primed to receive the message without feeling annoyed. Relevance is another key factor.
No gamer wants to see an advertisement for cat food when they do not own a cat, or a promotion for a game they have already completed. Contextual, targeted ads that align with a player’s interests will be essential to prevent users from abandoning the experience at the first sign of irrelevant content.
When executed correctly, such relevance can turn ads into a valuable bridge between brands and a highly engaged audience. Nonetheless, Xbox is venturing into largely uncharted territory. The first unknown is how the gaming community will react to a new ad model; the second is whether the revenue generated will be sufficient to sustain the approach over the long term. The ad‑supported game‑streaming initiative reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has shown a willingness to experiment with innovative business models.
Historically, many gaming ad campaigns have relied on a "watch an ad, earn an extra life" structure, offering a clear, tangible reward for the viewer. Xbox’s proposal diverges from this pattern by asking players to watch an ad simply to access a game they already own. Our current data set does not yet reveal how this particular trade‑off will be received.
Nevertheless, 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 advertising a sustainable component of gaming, these two metrics will be crucial to monitor. In my view, Xbox will neither be the first nor the last company to experiment with ad‑supported gaming models.
Advertising has existed in games for decades, but often without the player’s experience as a primary consideration. Should Xbox succeed in delivering ads that feel seamless, relevant, and optional, it could pave the way for a new revenue paradigm across the industry, making video games more affordable and accessible for everyday gamers worldwide.