Virginie Chesnais serves as chief marketing officer at the ad‑technology analytics firm Happydemics. For many years, gamers have been skeptical of advertisements that appear within games, and their concerns are not unfounded. In‑game ads have earned a mixed reputation, often because they redirect users to external sites or apps, display misleading content, or feature close buttons that are difficult to locate, leading to frustration and annoyance.
A recent study conducted by eMarketer revealed that 52 percent of gamers would abandon a session if they encountered several intrusive ad elements. Losing half of your audience at the moment you are 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 players would actually increase the frequency with which they play a title if the in‑game advertisements were of high quality and relevance.
With Xbox currently piloting an ad‑supported game‑streaming service amid a steady climb in the cost of gaming, there is a genuine opportunity for well‑crafted ads to find a welcoming niche within the industry. The argument for a modest advertising model in games is more compelling than many assume, and it is already partially validated by the success of linear media platforms. Services such as Netflix, Disney+, and other streaming giants have demonstrated that a stable, ad‑free tier can coexist with a lower‑priced, ad‑supported tier, generating additional revenue while expanding the audience base. Should Xbox’s experiment prove viable, it could preserve its subscription revenue while unlocking a fresh, previously untapped income stream—something the brand could certainly use at this juncture.
The relevance of this development is heightened by the fact that console gaming is increasingly positioned as a premium offering. Prices for games, consoles, accessories, and downloadable content continue to rise, making it harder for the average consumer to justify the expense and creating a barrier for casual or budget‑conscious gamers. Xbox itself has stated that, when executed correctly, advertising can lower the cost of entry to gaming.
Mobile gaming already shows that ad‑supported tiers can provide a gateway for players who are unwilling or unable to pay large upfront fees. Crucially, any advertising model Xbox adopts would be optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those who are comfortable with occasional ads could enjoy a reduced‑price option.
By offering a two‑tier system, Xbox aims to retain its core fan base while simultaneously making games more approachable for newcomers. Although concrete survey data on this specific announcement is not yet available, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second commercial if it granted them an hour of gameplay in a favorite or new title. Happydemics’ own data—derived from 285 in‑game campaigns across the United Kingdom and North America—shows that in‑game advertisements consistently outperform television, social media, and other online formats when it comes to ad recall and accurate brand attribution.
In other words, players are more likely to remember and correctly associate an ad they saw while gaming with the brand that placed it. Xbox’s “around‑the‑game” approach—showing ads before the game begins rather than embedding them within the gameplay—adds another layer of intrigue. Our research indicates that pre‑game placements have a distinct advantage in terms of recall and attribution compared with ads that appear directly inside the game world. This distinction matters because, while we can often remember ads that flash on a TV screen or scroll through a social feed, we do not always connect those impressions to a specific brand.
Gaming appears to occupy a unique position in this respect, which likely explains why companies like Xbox and Electronic Arts are increasingly exploring ad‑based models. It is also worth noting that Xbox’s ads would not be intrusive in‑game; they would play before the session starts, preserving the immersive experience once the player is inside the virtual world. This separation benefits both the player—who avoids disruption during gameplay—and the advertiser, who wants their message to be part of the overall experience rather than a jarring interruption. Relevance is another essential factor.
No one enjoys seeing an advertisement for cat food when they do not own a cat, or for a game they have already completed. By delivering contextual, targeted ads that make sense for the individual user, Xbox can keep players from abandoning the session at the first sign of an irrelevant commercial, while simultaneously offering brands a highly effective platform to reach new audiences.
Nonetheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to pre‑game advertising, 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 the boldness of Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment and take calculated risks. Only time will reveal whether this strategy delivers the intended results.
Historically, many gaming ad campaigns have relied on a “watch an ad, earn an extra life” mechanic. Xbox’s proposal is different: players would watch an ad to access a game they already own, rather than to earn a reward. Our dataset does not yet contain enough evidence to predict how this will be received.
However, broader research on ad format perception shows that descriptors such as “non‑intrusive” and “immersive” are among the most positively received. If Xbox—and potentially other platforms in the future—are to make advertising a lasting component of gaming, these two qualities will be critical.
In my view, Xbox will neither be the first nor the last company to test this model. Advertising in games is not new, but it has rarely been implemented with the player’s experience as the primary focus. Should Xbox succeed, it could pave the way for other developers and publishers to adopt similar strategies, ultimately making video games more affordable and accessible for everyday gamers.