Virginie Chesnais serves as the chief marketing officer at Happydemics, an analytics platform focused on advertising technology. For many years, gamers have looked at in‑game advertising with suspicion, and that wariness is understandable.
The reputation of ads in video games is often tarnished by issues such as redirects to unrelated sites, misleading creatives, or hidden close buttons that frustrate players. A recent study by eMarketer highlighted that 52 % of respondents would stop playing a title if they encountered several intrusive ad elements. Losing more than half of an audience at the moment you are trying to engage them is hardly an effective tactic. Nevertheless, advertisements do not have to be detrimental.
The same research revealed that one in five gamers would actually increase the frequency with which they played a game if the in‑game ads were of a high standard. With Xbox currently piloting an ad‑supported streaming service for games, and with the overall cost of gaming climbing steadily, there is a genuine opportunity for well‑crafted ads to find a welcoming niche within the gaming ecosystem. The argument for a hybrid "ads‑for‑games" model is more compelling than many assume, especially when we look at the success of linear media. Platforms such as Netflix, Disney+, and other on‑demand services have demonstrated that a mixed‑model approach—offering both ad‑free subscriptions and cheaper, ad‑supported tiers—can generate substantial revenue while expanding the audience.
If Xbox’s experiment proves viable, it could not only preserve its existing subscriber base but also unlock an entirely new revenue stream at a moment when the brand is seeking fresh financial inputs. This development matters because console gaming is increasingly being positioned as a premium experience. The price tags on new consoles, flagship titles, accessories, and downloadable content have risen to levels that many casual gamers find difficult to justify, effectively erecting a barrier to entry.
Xbox itself has stated that, when executed correctly, advertising can lower the cost barrier for players. The mobile gaming sector already provides a clear illustration: ad‑supported versions of popular games allow users to enjoy the experience without paying an upfront fee, relying instead on short commercial breaks. Importantly, any ad‑based option would remain optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those who are willing to tolerate brief ads could access the same content for less money.
By offering a two‑tiered system, Xbox hopes 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 Xbox’s specific rollout yet, it is reasonable to assume that a large majority of gamers would accept a 30‑second commercial if it granted them an hour of playtime on a favorite or newly released title. Xbox’s internal research likely supports this hypothesis.
Happydemics analyzed 285 in‑game advertising campaigns across the United Kingdom and North America and found that such ads consistently outperformed television, social media, and standard online placements in terms of recall and attribution. In other words, gamers are more likely to remember an ad they saw while playing and correctly associate it with the brand that served it.
Xbox’s “around‑the‑game” strategy—showing ads before the gameplay begins rather than embedding them within the interactive environment—adds another layer of interest. The data indicate that pre‑game formats achieve higher recall and attribution scores compared with ads placed directly inside the game world.
The distinction matters because, while we can often recall ads seen on TV or scrolling through a feed, those memories do not always translate into clear brand connections. Gaming appears to occupy a unique space where ad exposure more readily converts into brand awareness, which likely explains why companies like Xbox and Electronic Arts are exploring ad‑based monetisation models.
It is crucial to note that Xbox’s ads are planned to be pre‑game, not intragame. Traditional in‑game placements tend to excel further down the conversion funnel, boosting brand‑image uplift, consideration, interest, and overall likability.
A combined approach—leveraging both pre‑game and in‑game ads—could theoretically offer advertisers the best of both worlds, though it also risks provoking greater resistance from players. Xbox has pledged that the commercials will be non‑intrusive. By positioning ads before the actual gameplay, 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 its message to be part of the experience rather than a disruption.
Relevance will be key. No gamer wants to see an advertisement for cat food when they have no feline companion, or for a game they have already completed. Contextual, targeted ads that make sense for the individual player will help prevent premature exits and give brands a more effective platform to reach fresh audiences.
Nonetheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to the presence of ads; the second is whether the revenue generated will justify making the model a permanent fixture. The move toward ad‑supported game streaming reflects a bold, risk‑taking attitude from Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with new business models. Whether the strategy will succeed remains to be seen.
Historically, many of our gaming‑ad projects have relied on the classic "watch an ad, earn an extra life" mechanic. Xbox’s proposal is different: it asks players to view an ad to access a game they already own. Our existing data set does not yet reveal how this particular trade‑off will be received.
However, broader research on ad‑format perception shows that when respondents are asked to describe ads they remember, terms like "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 to test such a model. Advertising in video games has been around for years, but it has rarely been implemented 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 and, more importantly, make video games far more affordable and accessible for everyday players.