Virginie Chesnais serves as Chief Marketing Officer at the ad‑technology analytics firm Happydemics. For years, many gamers have viewed in‑game advertising with suspicion, and there are good reasons for that wariness.
The reputation of ads in video games is mixed; players often encounter redirects to unrelated sites or apps, misleading content, or tiny, hard‑to‑find close buttons that frustrate the experience. A recent study by eMarketer highlighted that 52 % of gamers would abandon a session if they ran into multiple intrusive ad elements. Losing half of your audience at the moment you’re trying to engage them is hardly an effective strategy.
However, advertising does not have to be a nuisance. The same research revealed that one in five gamers would actually increase the frequency with which they play a title if the in‑game ads were of a high quality and felt relevant. This suggests that well‑crafted ads can enhance, rather than detract from, the overall experience. Xbox is currently piloting an ad‑supported game‑streaming service at a time when the price of playing is steadily climbing.
In this environment, premium‑grade advertisements could find a natural home within the gaming ecosystem. The argument for introducing a modest ad‑for‑games model is more compelling than many anticipate, and it has already been partially validated by linear media platforms. Services such as Netflix, Disney+, and others have demonstrated that a hybrid approach—offering both ad‑free subscriptions and lower‑cost, ad‑supported tiers—can generate substantial revenue while expanding the audience base. Should Xbox’s experiment succeed, it would not only preserve its paying subscriber base but also unlock a previously untapped revenue stream that the brand urgently needs.
This development matters because console gaming is increasingly positioned as a premium service. The cost of new releases, console hardware, accessories, and downloadable content (DLC) continues to rise, creating a financial barrier for the average player. Xbox itself has acknowledged that, when executed correctly, advertising can lower the cost of entry to gaming.
The mobile gaming sector already illustrates how ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases. Crucially, any ad model Xbox introduces will be optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads.
By offering a two‑tier system—ad‑free for paying members and ad‑supported for those who opt in—Xbox hopes to retain its loyal fan base while simultaneously making games more accessible to newcomers. Although there is no concrete survey data on this specific rollout yet, 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 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 indicates that in‑game advertisements consistently outperform traditional TV, social, and online ads in terms of recall and attribution. Players are more likely to remember an ad they saw while playing and to correctly associate it with the brand that served it. Xbox’s “around‑the‑game” approach—showing ads before the game loads rather than embedding them within the gameplay—adds another layer of interest. Our data show that pre‑game formats achieve higher recall and attribution scores compared with intrinsic in‑game placements.
This distinction matters because, while we can often recall ads seen on television or scrolling through social feeds, those memories do not always translate into a clear brand connection. Gaming appears to excel in this metric, which may explain why companies like Xbox and EA are increasingly exploring ad‑based models.
It is important to note that Xbox’s ads will be pre‑game, not in‑game. In‑game ad formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and likeability.
A combined strategy—leveraging both pre‑game and in‑game ads—could offer advertisers the best of both worlds, though it also raises the risk of player pushback. Xbox has pledged that its advertisements will be non‑intrusive.
By placing ads before the gameplay begins, the company aims to preserve the immersive experience that gamers cherish. This approach benefits both players, who avoid interruptions during play, and advertisers, who want their messages to be part of the experience rather than a disruptive element. Relevance will be key. No gamer wants to see an ad for cat food when they don’t own a cat, or a promotion for a game they have already completed.
Contextual, well‑targeted ads that make sense to the viewer will help prevent users from abandoning the session at the first sign of an irrelevant commercial, while also providing brands with a premium platform to reach new audiences. Nevertheless, Xbox is venturing into uncharted territory.
The first unknown is how players will react to the presence of ads, and the second is whether the ad revenue will be sufficient to sustain this model over the long term. The move toward ad‑supported game streaming is a bold experiment by Xbox CEO Asha Sharma, who has demonstrated a willingness to take calculated risks. Only time will reveal whether the strategy delivers the intended results.
Historically, our work in gaming advertising has focused on “watch an ad, earn an extra life” type incentives. Xbox’s proposition is different: it asks players to watch an ad to access a game they already own.
Our existing data set does not yet indicate 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—aim to make advertising a successful 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 games is not new, but it has often been implemented without the player’s experience as a priority.
Should Xbox manage to strike the right balance, it could pave the way for similar initiatives across the industry, ultimately making video games more affordable and accessible for everyday gamers.