Virginie Chesnais serves as the chief marketing officer at Happydemics, a platform that provides analytics for advertising technology. For many years, gamers have viewed in‑game advertising with suspicion, and there are good reasons for that wariness. The reputation of ads in video games is mixed: players often encounter redirects to unrelated websites or apps, misleading content, or tiny close buttons that are hard to find, all of which generate frustration.
A recent study conducted by eMarketer highlighted that 52 % of gamers would stop playing if they ran into several intrusive ad elements. Losing half of an audience at the moment you’re trying to engage them is hardly an effective approach. However, advertisements do 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 high‑quality and well‑executed.
With Xbox currently piloting an ad‑supported game‑streaming service and the overall expense of gaming continuing to climb, premium‑grade ads could find a welcoming niche within the gaming ecosystem. The argument for introducing a form of "ads‑for‑games" model is more compelling than many anticipate, and it has already been validated to some extent by linear media.
Services such as Netflix, Disney+ and other streaming platforms have demonstrated that offering both ad‑free and ad‑supported tiers can generate significant revenue while still delivering a reliable service. Should Xbox’s experiment prove successful, it would not only preserve its subscription‑based revenue but also unlock an entirely new, previously untapped income stream at a moment when the brand is eager for additional cash flow. This development matters because console gaming is increasingly positioned as a premium product. The cost of games, consoles, peripherals and downloadable content has risen sharply, making it harder for the average consumer to justify the expense and creating a barrier for casual or budget‑conscious players.
Xbox itself has stated that, when executed correctly, advertising can lower the price of entry to 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, allowing them to experience games for free or at a reduced cost in exchange for watching ads. Crucially, the model remains optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads.
By offering a two‑tier system, Xbox hopes to keep its core fan base happy while simultaneously making games more accessible to newcomers who might otherwise be priced out. Although there is no specific survey data on the latest Xbox announcement, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second commercial if it meant gaining an hour of playtime on a favorite or new title. Xbox’s internal data likely supports this hypothesis.
Happydemics has analyzed 285 in‑game advertising campaigns across the United Kingdom and North America, finding that in‑game ads consistently outperform television, social media and other online formats when it comes to ad recall and attribution. In other words, gamers are more likely to remember an ad they saw while playing and correctly associate it with the brand that served it. This is where Xbox’s "around‑the‑game" strategy—ads displayed before a game launches rather than embedded within the gameplay—becomes intriguing.
Our research shows that pre‑game placements achieve higher recall and attribution scores compared with intrinsic in‑game placements. The distinction matters because, while we can often recall ads that appear on TV or in our social feeds, we do not always link those impressions to the underlying brands. Gaming appears to operate in its own league for this metric, which may explain why companies like Xbox and EA are increasingly exploring ad‑based revenue models.
It is also important to note that Xbox’s ads are not meant to interrupt the gameplay itself; they are pre‑game. Traditional in‑game formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest and overall ad likability. A hybrid approach that combines both pre‑game and in‑game ads could theoretically offer the best of both worlds for advertisers, though it also risks greater pushback from players who value an uninterrupted experience.
Xbox has pledged that its ads will be non‑intrusive. By placing commercials before the game begins, the company aims to preserve the immersive nature of the experience. This is a key consideration not only for gamers but also for advertisers, who want their messages to complement rather than disrupt the user journey.
Relevance will be another critical factor. No one enjoys seeing an ad for cat food when they don’t own a cat, or a promotion for a game they have already completed.
By delivering contextual, targeted ads that make sense for the individual player, Xbox can keep users from abandoning the session while providing brands with a high‑impact platform to reach fresh audiences. Nevertheless, Xbox is navigating uncharted territory. The first unknown is how players will react to the presence of ads at all, and the second is whether the revenue generated will be sufficient to sustain the model over the long term. The move toward ad‑supported streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who appears willing to experiment with new business models.
Only time will reveal whether this gamble pays off. Historically, many gaming ad campaigns have relied on the classic "watch an ad, earn an extra life" mechanic. Xbox’s proposal differs: it asks players to watch an ad in order to access a game they already own.
Our existing data set does not yet indicate how this particular trade‑off will be received. Related research on ad‑format perception—where respondents who recall an ad are asked to select positive descriptors—has consistently highlighted "non‑intrusive" and "immersive" as the top attributes. If Xbox and future adopters want to make gaming ads a lasting success, these two qualities will need to be prioritized.
In my view, Xbox will not be the first nor the last platform to experiment with this approach. 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 open the door for other publishers to follow suit, ultimately making video games more affordable and reachable for the everyday gamer.