Virginie Chesnais serves as the chief marketing officer at Happydemics, an analytics platform that focuses on advertising technology. For many years, gamers have been skeptical about the presence of advertisements within games, and their concerns are not unfounded.
The reputation of in‑game ads is mixed, often marred by issues such as redirects to unrelated websites or apps, misleading creative, and close buttons that are difficult to locate. These irritations have contributed to a general wariness among the gaming community. A recent study conducted by eMarketer highlighted the severity of the problem: 52 % of respondents said they would stop playing a title if they encountered multiple disruptive ad elements.
Losing half of an audience at the very moment you are trying to engage them is hardly an effective approach. However, advertisements do not have to be synonymous with annoyance.
The same research indicated that one in five gamers would actually increase the frequency with which they play a game if the in‑game ads were of a high standard. Quality matters, and well‑crafted ads can enhance, rather than detract from, the gaming experience. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming continuing to rise, there is a realistic chance that premium‑quality ads could find a welcoming home within the console ecosystem. The argument for introducing an "ads‑for‑games" model is stronger than many anticipate, 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 offering both ad‑free and ad‑supported tiers can generate substantial revenue while expanding the audience base. Should Xbox’s experiment prove profitable, it would not only preserve its subscription‑based revenue but also unlock a fresh, previously untapped income stream—something the brand could certainly use at this juncture. This development matters because console gaming is increasingly being positioned as a premium offering.
Prices for hardware, software, accessories, and downloadable content are climbing, creating a financial barrier for the average consumer. When the cost of entry becomes prohibitive, many potential players simply stay on the sidelines. Xbox itself has acknowledged that, when executed correctly, advertising can lower the cost of access to games. The mobile gaming sector already provides a clear illustration: ad‑supported tiers allow players to engage with titles without paying large upfront fees, thereby widening the market.
Crucially, any advertising model Xbox adopts would be optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those willing to view ads could enjoy a reduced‑price or free tier.
By offering a two‑track system, Xbox aims to keep its loyal fan base satisfied while simultaneously inviting newcomers who might otherwise be deterred by price. Although there is no concrete survey data on this specific announcement yet, it is reasonable to assume that a large majority of gamers would tolerate a brief 30‑second commercial if it meant gaining an hour of gameplay on a beloved or new title.
Xbox’s internal research is likely to confirm this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America reveals that in‑game advertisements consistently out‑perform television, social media, and other online formats in terms of ad recall and attribution. Players tend to remember and correctly associate these ads with the brands that served them.
This is where Xbox’s "around‑the‑game" approach—showing ads before the game launches rather than within the gameplay itself—becomes particularly compelling. Our data indicate that pre‑game placements generate higher recall and stronger brand attribution compared with ads embedded directly inside the game environment. The distinction matters because, while we can often recall ads seen on TV or scrolling through a feed, we do not always link those impressions to a specific brand. Gaming appears to occupy a unique space where ad memory and brand linkage are especially strong, which likely explains why companies like Xbox and Electronic Arts are exploring ad‑based monetisation more aggressively.
It is also important to note that Xbox’s ads are not intended to interrupt the core gameplay; they will appear before the session begins. In‑game ad formats tend to excel further down the conversion funnel, delivering better results for brand image uplift, consideration, interest, and overall likability. A hybrid model that combines both pre‑game and in‑game ads could offer advertisers the best of both worlds, though it might also provoke additional pushback from players who are sensitive to ad frequency.
Xbox has promised that its ads will be non‑intrusive. By placing advertisements in the pre‑game window, 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, whose message is delivered in a context that feels less disruptive. Relevance will be key.
No one wants to see an advertisement for cat food when they have no feline companion, or a promotion for a game they have already completed. By delivering contextual, targeted ads that make sense for the individual player, Xbox can minimise the risk of users abandoning the experience while maximising the value for brands seeking new audiences. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how players will react to the presence of ads, and the second is whether the revenue generated will be sufficient to sustain the model over the long term. The decision to explore ad‑supported streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with new business models.
Whether this gamble pays off remains to be seen. Historically, many gaming ad campaigns have relied on "watch an ad, earn an extra life" mechanics. 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 reveal how this particular exchange will be received.
Research on ad format perception does, however, provide some insight. When participants are asked to describe ads they remember, terms such as "non‑intrusive" and "immersive" frequently emerge as positive descriptors. If Xbox—and potentially other platforms in the future—wish to make gaming ads successful, these two attributes will be essential metrics to monitor.
My forecast is that Xbox will neither be the first nor the last company to test this approach. Advertising has been part of gaming for many years, but it has not always been designed with the player’s experience at the forefront. Should Xbox manage to strike the right balance, it could pave the way for similar strategies across the industry and, more importantly, make video games more affordable and accessible for everyday gamers.