Virginie Chesnais serves as the chief marketing officer at Happydemics, an analytics platform that focuses on advertising technology. For many years, gamers have viewed in‑game advertising with suspicion, and their concerns are not unfounded. The reputation of ads in the gaming world is mixed: players often encounter redirects to unrelated websites or apps, misleading content, and dismissible close buttons that are hard to locate, all of which lead to frustration.
A recent study conducted by eMarketer highlighted the severity of the issue, revealing that 52 % of respondents would abandon a game after encountering multiple disruptive advertising elements. Losing half of an audience at the very moment you are trying to engage them is hardly an effective approach.
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 seamlessly integrated.
This suggests that well‑executed advertising can enhance, rather than detract from, the gaming experience. Xbox is currently experimenting with an ad‑supported game‑streaming service at a time when the overall cost of playing is climbing steadily. In this environment, premium‑quality ads could find a welcoming niche within the gaming ecosystem. The argument for introducing an "ads‑for‑games" model is more compelling than it might initially appear, especially when we look at the success of linear media platforms.
Services such as Netflix, Disney+, and other streaming giants 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 viable, it would not only preserve its subscription‑based revenue but also unlock an entirely new, previously untapped income stream—something the brand could certainly use given recent financial pressures. This development matters because console gaming is increasingly being positioned as a premium product.
The price tags attached to new games, consoles, accessories, and downloadable content continue to rise, making it harder for the average consumer to justify the expense. As a result, many potential players are being priced out of the market. Xbox itself has stated that, when executed correctly, advertising can lower the barrier to entry for gamers. The mobile gaming sector already offers a clear precedent: ad‑supported tiers allow players to enjoy games without paying large upfront fees, thereby expanding the overall audience.
Crucially, any advertising model Xbox adopts will be optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads. By providing a two‑tier system—ad‑supported and ad‑free—Xbox hopes to keep its loyal fan base while simultaneously making its games more accessible to newcomers.
Although there is no specific survey data on this particular announcement yet, it is reasonable to assume that most gamers would tolerate a 30‑second commercial if it meant gaining an hour of playtime in a beloved or new title. Xbox likely has internal data that supports this hypothesis.
Happydemics has analyzed 285 in‑game campaigns across the United Kingdom and North America, finding that in‑game advertisements consistently outperform TV, social, and other online formats when it comes to recall and attribution. In other words, players are more likely to remember an ad they see while gaming and correctly associate it with the sponsoring brand. Xbox’s “around‑the‑game” approach—showing ads before the game starts rather than embedding them within the gameplay—adds another layer to this insight.
Our data indicate that pre‑game placements achieve higher recall and attribution scores compared with ads that appear directly inside the game world. The distinction is important because while we can often remember ads viewed on television or scrolling through social feeds, we do not always link those impressions to the corresponding brands.
Gaming appears to occupy a unique space where ad recall translates more directly into brand awareness, which likely explains why companies such as Xbox and EA are increasingly exploring ad‑based monetisation. It is also worth noting that Xbox’s ads are planned to be pre‑game, not in‑game. In‑game ad formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and overall likability.
A hybrid model that combines both pre‑game and in‑game ads could theoretically offer advertisers the best of both worlds, though it might also provoke greater resistance from players who are sensitive to interruptions. Xbox has promised that the advertisements will not be intrusive. By placing ads before the actual gameplay begins, the company aims to preserve the immersive experience that gamers value. This approach benefits both the player—who enjoys an uninterrupted session—and the advertiser, who wants their message to be part of the experience rather than a disruptive nuisance.
Relevance will be key. No gamer wants to see an ad for cat food when they don’t own a cat, or for a game they have already completed.
Contextual, well‑targeted ads that make sense for the individual user will help ensure that players do not abandon the session the moment an advertisement appears, while simultaneously giving brands a highly effective platform to reach fresh audiences. Nonetheless, Xbox is navigating uncharted territory.
The first unknown is how players will react to the presence of ads in a console environment. The second is whether the revenue generated will be sufficient to sustain the model over the long term. The decision to explore ad‑supported game streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with new business models.
Only time will reveal whether this strategy delivers the intended results. Historically, many gaming ad campaigns have been built around a "watch an ad, earn an extra life" premise. Xbox’s proposition differs: players would watch an ad to gain access to a game they already own.
Our existing data set does not yet provide a clear answer on how this will be received. However, broader research on ad‑format perception shows that when respondents are asked to describe ads they remember, terms such as "non‑intrusive" and "immersive" rank among the most positive descriptors. If Xbox—and potentially other platforms in the future—aim to make advertising a lasting component of gaming, these two qualities will be essential metrics to monitor. My forecast is that Xbox will neither be the first nor the last company to test this kind of model.
Advertising in games has existed for years, but it has rarely been designed with the player’s experience at the forefront. Should Xbox succeed in delivering ads that feel natural and optional, it could pave the way for other developers and publishers to follow suit, ultimately making video games more affordable and reachable for the everyday gamer.