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 because they often redirect users to unrelated sites or apps, feature misleading content, or hide the close button so poorly that players struggle to dismiss them. A recent study by eMarketer revealed that 52 % of gamers would abandon a title if they encountered several disruptive ad elements. Losing half of your audience at the moment you are trying to engage them is hardly a winning strategy.
Nevertheless, advertisements do not have to be detrimental. 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.
This suggests that, when done right, ads can enhance rather than detract from the experience. Xbox is currently piloting an ad‑supported game‑streaming service at a time when the overall cost of gaming is climbing steadily.
In this environment, premium‑grade advertisements could find a receptive home. The logic behind offering a gaming‑specific ad model mirrors the success seen in linear media: platforms such as Netflix, Disney+, and other streaming services have demonstrated that a mixed‑revenue approach—combining subscription fees with an ad‑supported tier—can be lucrative. Should Xbox’s experiment prove viable, it could not only preserve its paying subscriber base but also unlock a fresh revenue stream that the brand urgently needs. The relevance of this development is amplified by the fact that console gaming is increasingly being positioned as a premium service.
Prices for games, consoles, peripherals, and downloadable content have risen to the point where many casual players find them hard to justify. This price inflation creates a significant entry barrier for the average consumer. Xbox itself has argued that, when executed thoughtfully, advertising can lower the cost of access to gaming.
The mobile‑gaming sector already offers a clear precedent: ad‑supported tiers enable players to engage with games without paying large upfront fees, thereby expanding the overall player pool. Importantly, Xbox’s model would be entirely optional—players who prefer an uninterrupted experience could continue to pay a subscription fee, while those willing to watch ads could enjoy a reduced‑price or free tier. By offering a two‑track system, Xbox hopes to keep its loyal fan base while simultaneously opening the door to new users. Although no formal survey data exists yet on this particular announcement, it is reasonable to assume that most gamers would tolerate a short, 30‑second commercial if it granted them an hour of playtime on a favorite or newly released title.
Xbox likely has internal data supporting this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that in‑game advertisements consistently outperform television, social, and other online formats when it comes to ad recall and attribution. Players are more likely to remember an ad they saw while gaming and to correctly associate it with the brand that placed it. This insight makes Xbox’s “around‑the‑game” approach—ads shown before the game launches rather than embedded within the gameplay—particularly compelling.
Our data indicate that pre‑game placements enjoy a clear advantage in recall and attribution compared with intrinsic in‑game spots. While traditional TV or social ads may be memorable, they do not always translate into a strong brand‑to‑consumer link.
Gaming appears to occupy a unique niche where recall and attribution are especially high, which explains why companies such as EA and now Xbox are exploring ad‑based models. It is crucial to note that Xbox’s ads are planned to appear before the game begins, not during the actual play session. In‑game ad formats typically excel later in the marketing funnel, driving brand‑image uplift, consideration, interest, and likeability. A hybrid strategy that combines both pre‑game and in‑game ads could theoretically offer advertisers the best of both worlds, though it also risks greater pushback from players who value an uninterrupted experience.
Xbox has pledged that the advertisements will be non‑intrusive. By placing ads before the game starts, they avoid breaking immersion during gameplay—a key concern for both gamers and advertisers. Advertisers want their messages to feel like a seamless part of the experience rather than a jarring interruption. Relevance will also be essential.
Nobody wants to see an advertisement for cat food if they don’t own a cat, or a promotion for a game they have already completed. Contextual, well‑targeted ads that make sense for the individual player will help prevent frustration and keep users engaged long enough for the ad to achieve its purpose. Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to pre‑game advertising; the second is whether the revenue generated will justify making the model a permanent fixture.
The move reflects a bold, risk‑taking attitude from Xbox CEO Asha Sharma, who appears willing to experiment with new monetisation pathways. Historically, many gaming ad campaigns have relied on a “watch an ad, earn an extra life” mechanic. Xbox’s proposal, however, asks players to watch an ad simply to access a game they already own.
Our existing data set does not yet reveal how this will be received. Yet broader research on ad‑format perception shows that descriptors such as “non‑intrusive” and “immersive” rank among the most positive attributes participants assign to ads.
If Xbox and future adopters want to make gaming ads successful, they will need to focus heavily on these two dimensions. In my view, Xbox will not be the first nor the last platform to trial this approach. Advertising has been part of gaming for years, but it has rarely been designed with the player experience as the primary concern. Should Xbox manage to strike the right balance, it could pave the way for other companies to follow, ultimately making video games more affordable and accessible for everyday gamers.