Virginie Chesnais serves as Chief Marketing Officer at the ad‑technology analytics firm Happydemics. For many years, gamers have approached in‑game advertising with skepticism, and their concerns are not unfounded. The reputation of ads in video games is mixed: users often encounter redirects to unrelated sites or apps, misleading content, or dismiss buttons that are hard to locate, all of which lead to frustration.
A recent study conducted by eMarketer revealed that 52 % of players 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 tactic. 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 cost of gaming continuing to climb, premium‑grade ads could find a receptive home in the console ecosystem.
The argument for offering a gaming‑focused ad model is more compelling than many assume, and it has already been validated to some extent by linear media. Streaming platforms such as Netflix and Disney+ have demonstrated that a stable service can coexist with ad‑supported tiers, generating additional revenue while keeping the core subscription attractive.
Should Xbox’s experiment succeed, it could preserve its paying subscriber base and simultaneously unlock a fresh, previously untapped stream of income—something the brand urgently needs. This development matters because console gaming is increasingly positioning itself as a premium offering. Prices for games, hardware, accessories, and downloadable content keep rising, making it harder for the average consumer to justify the expense and erecting a barrier for casual gamers. Xbox itself has stated that, when executed correctly, advertising can help lower the entry cost for players.
The mobile‑gaming sector already shows that ad‑supported options can give users a way to enjoy games without paying a large upfront fee. Crucially, participation would be optional.
Players who prefer an ad‑free experience could continue to do so by paying a subscription fee. By providing a two‑tier system, Xbox hopes to keep its loyal community while also opening the door for newcomers who might otherwise be priced out. Although no formal survey data exists yet on this particular rollout, it is reasonable to wager that a large majority of gamers would tolerate a 30‑second commercial if it granted them an hour of playtime on a favorite or new title. Xbox’s internal analytics are likely to confirm that intuition.
Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that in‑game ads consistently outperform television, social media, and other online formats when it comes to recall and attribution. Players are more likely to remember an ad they saw while gaming and correctly associate it with the sponsoring brand. This is where Xbox’s “around‑the‑game” strategy—placing ads outside the actual gameplay, such as before a session starts—becomes intriguing. Our data indicate that these pre‑game placements achieve higher recall and attribution scores compared with ads embedded directly within the game environment.
The distinction matters because, while we can often recall ads seen on TV or scrolling through feeds, we do not always link them to the brands behind them. Gaming appears to sit in a league of its own for this metric, which may explain why companies like Xbox and EA are increasingly exploring ad‑based models. It is essential to note that Xbox’s ads would not be in‑game but pre‑game.
Traditional in‑game formats tend to excel further down the funnel, delivering stronger lifts in brand image, consideration, interest, and likability. A hybrid approach—combining pre‑game and in‑game ads—could offer advertisers the best of both worlds, though it might also provoke greater pushback from players. Xbox has pledged that its ads will be non‑intrusive, a claim that is easy to understand.
By serving commercials before the game begins, the experience remains uninterrupted, preserving immersion for the player. This approach benefits advertisers as well, because they want their messages to complement the experience rather than break it. Relevance will be key.
No gamer wants to see an advertisement for cat food when they don’t own a cat, or for a game they have already completed. By delivering contextual, purposeful ads, Xbox can keep players from abandoning a session while giving brands a high‑impact platform to reach fresh audiences.
Nevertheless, Xbox is venturing into largely uncharted territory. First, it must gauge how players will react to this new ad format; second, it must determine whether the revenue generated will justify making the model a permanent fixture. The decision to explore ad‑supported streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has shown a willingness to experiment with innovative ideas.
Only time will reveal whether the strategy delivers the intended results. Historically, our work on gaming ads has focused on “watch an ad, earn an extra life” type exchanges. Xbox’s proposal asks players to watch an ad simply to access a game they already own, a scenario not yet represented in our data set.
Yet broader research on ad‑format perception—where respondents who recall an ad are asked to describe it—shows that descriptors such as “non‑intrusive” and “immersive” rank among the most favored. If Xbox, and perhaps other platforms in the future, aim to make gaming ads successful, these two attributes will be critical performance indicators. My forecast is that Xbox will neither be the first nor the last to trial such a model.
Advertising in games has existed for a long time, but it has rarely 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 initiatives across the industry, ultimately making video games more accessible to everyday players.