Virginie Chesnais serves as the chief marketing officer at Happydemics, an ad‑tech analytics firm. For many years, gamers have looked at in‑game advertising with suspicion, and that wariness is not unfounded.
The reputation of ads in video games is mixed; players often encounter redirects to unrelated sites, misleading content, or hidden close buttons that are difficult to locate, leading to frustration. A recent study by eMarketer revealed that 52 % of gamers would abandon a session if they ran into multiple intrusive ad elements. Losing half of your audience at the very moment you are trying to engage them is hardly an effective approach.
However, advertisements do not have to be detrimental. The same research indicated that one in five players would actually increase the frequency with which they play a title if the in‑game ads were of a high standard and felt relevant.
With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming continuing to climb, well‑crafted ads could find a receptive niche within the gaming ecosystem. The argument for introducing a modest ad‑for‑games model is more compelling than many anticipate, as linear media has already demonstrated its viability. Platforms such as Netflix, Disney+, and other streaming services have proven that offering an ad‑supported tier alongside a premium subscription can generate substantial revenue. Should Xbox’s experiment succeed, it would not only preserve its paying subscriber base but also unlock an entirely new revenue stream—a welcome development for a brand that is currently seeking fresh sources of income.
This is significant because console gaming is increasingly being positioned as a premium experience. The price tags attached to new games, consoles, accessories, and downloadable content are rising steadily, making it harder for the average consumer to justify the expense and erecting a barrier to entry for casual gamers. Xbox itself has stated that, when executed correctly, advertising can lower the cost of accessing games.
Mobile gaming already shows that ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases, allowing them to engage with content for free or at a reduced price. Crucially, the system would be optional.
Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads. By offering a two‑tier model, Xbox hopes to keep its loyal community happy while simultaneously making games more approachable for newcomers. Although there is no specific survey data on this latest announcement, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second commercial if it granted them an hour of playtime on a favorite or brand‑new title.
Xbox’s internal data likely supports this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America demonstrates that in‑game advertisements consistently outperform television, social media, and standard online ads when it comes to recall and attribution. 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—placing ads before the gameplay begins rather than embedding them within the game world—adds another layer of appeal. Our data indicate that these pre‑game placements achieve higher recall and attribution scores compared with intrinsic in‑game spots.
The distinction matters because, while we can recall ads seen on TV or scrolling through a feed, that memory does not always translate into brand recognition. Gaming appears to operate in a league of its own regarding these metrics, which may explain why companies like Xbox and EA are increasingly exploring ad‑based models. It is important to note that Xbox’s ads are not in‑game; they are shown prior to the start of the session.
Traditional in‑game formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and likeability. A hybrid approach that combines pre‑game and in‑game ads could offer advertisers the best of both worlds, though it might also provoke greater resistance from players. Xbox has pledged that the advertisements will be non‑intrusive.
By delivering ads before the actual gameplay, the company aims to preserve the immersive experience that gamers value. This is beneficial for both the audience—who won’t have their play interrupted—and for advertisers, who want their messages to feel like a seamless part of the experience rather than a disruption.
Relevance will be key. No one wants to see an ad for cat food when they don’t own a cat, or a promotion for a game they have already completed. By ensuring that ads are contextual and provide a clear rationale for being shown, Xbox can keep players from abandoning the session while giving brands a high‑impact platform to reach new demographics. Nevertheless, Xbox is venturing into largely uncharted territory.
It remains uncertain how players will ultimately react to this model and whether the revenue generated will justify making it a permanent feature. The move to explore ad‑supported game streaming reflects a bold strategy by Xbox CEO Asha Sharma, who has demonstrated a willingness to take calculated risks. Time will tell whether this approach delivers the intended results.
Historically, many gaming ad campaigns have been built around the “watch an ad, earn an extra life” concept. Xbox’s proposition differs: players would watch an ad to access a game they already own. Our existing data set does not yet reveal how this specific trade‑off will be received. Research on ad format perception, which asks respondents to select positive descriptors for remembered ads, consistently highlights “non‑intrusive” and “immersive” as top attributes.
If Xbox and future adopters aim to make advertising a lasting part of gaming, these two qualities will need to be closely monitored. In my view, Xbox will neither be the first nor the last platform to test such a model. Advertising has been part of gaming for years, but rarely with the player’s experience at the forefront.
Should Xbox succeed in integrating ads in a way that feels natural and optional, it could pave the way for other companies and make video games considerably more accessible to everyday gamers.