Virginie Chesnais serves as Chief Marketing Officer at the ad‑technology analytics firm Happydemics. For many years, gamers have looked at in‑game advertising with suspicion, and their wariness is understandable. The reputation of ads in video games is mixed at best, often marred by annoyances such as sudden redirects to external sites, misleading content, or hide‑away close buttons that are difficult to locate. A recent study by eMarketers highlighted that 52 % of players would abandon a session if they encountered several intrusive advertising elements.
Losing half of an audience the moment you try to engage them is hardly a winning formula. Nevertheless, advertisements do not have to be a negative experience. The same research revealed that one in five gamers would actually play a title more often if the ads embedded within the game were of a high quality and relevance. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming on the rise, there is a genuine opportunity for well‑crafted ads to find a welcoming home inside the gaming ecosystem.
The argument for introducing an "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 streaming services have demonstrated that offering a lower‑priced, ad‑supported tier can generate substantial revenue while still delivering a consistent user experience. Should Xbox’s experiment prove viable, it could not only preserve its paying subscriber base but also unlock a fresh, previously untapped stream of income at a moment when the brand is eager for new cash flows. This is significant because console gaming is increasingly being positioned as a premium service.
Prices for games, consoles, accessories and downloadable content have all climbed, making it harder for the average consumer to justify the expense and creating a barrier for casual or budget‑conscious players. Xbox itself has stated that, when executed correctly, advertising can lower the cost of entry to gaming.
Mobile gaming already provides a clear precedent: ad‑supported tiers allow players to access games without paying large upfront fees, thereby widening the market. Crucially, any advertising model would remain optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads.
By offering a two‑tier system, Xbox aims to keep its loyal fanbase while simultaneously opening the door for newcomers who might otherwise be priced out. Although there is no specific survey data on this particular rollout yet, it is reasonable to assume that most gamers would tolerate a short, 30‑second advertisement if it meant they could play a beloved title or a new release for an hour without additional cost.
Xbox likely has internal data supporting that assumption. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that in‑game advertising consistently outperforms TV, social and other online formats in terms of recall and attribution. In other words, people are more likely to remember an ad they saw while playing and correctly associate it with the brand that displayed it.
This is where Xbox’s "around‑the‑game" strategy—ads that appear before the game launches rather than during gameplay—becomes intriguing. Our data indicate that pre‑game placements generate higher recall and attribution scores than ads embedded directly within the game world. The distinction matters because, while we can often recall commercials seen on television or scrolling through a social feed, we don’t always link those impressions to the brands that delivered them.
Gaming appears to be in a league of its own for this metric, which may explain why companies like Xbox and EA are increasingly exploring ad‑based monetisation. It is essential to note that Xbox’s ads will be pre‑game, not in‑game. In‑game formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest and overall likeability.
A hybrid approach—combining pre‑game and in‑game ads—could theoretically give advertisers the best of both worlds, but it also risks provoking greater pushback from players who value an uninterrupted experience. Xbox has promised that the advertisements will not be intrusive.
By placing ads before the actual gameplay begins, the company hopes to preserve the immersive quality of the experience. This is a win‑win: players enjoy an uninterrupted session, and advertisers get a slot that feels integrated rather than disruptive. Relevance will be another key factor. No gamer wants to see an ad for cat food when they don’t own a cat, or for a game they have already completed.
Contextual, well‑targeted ads that make sense in the moment will help keep players from abandoning the session at the first sign of advertising, while simultaneously giving brands a highly engaged audience. Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will actually react to these pre‑game ads; 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 shown a willingness to experiment with new business models. Only time will reveal whether the gamble pays off. Historically, many of our gaming‑ad projects have centred 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 tell us how this will be received. However, research on ad‑format perception indicates that descriptors such as "non‑intrusive" and "immersive" rank among the most positively viewed attributes.
If Xbox and future adopters want to make gaming ads successful, these two qualities will need to be closely monitored. My forecast is that Xbox will neither be the first nor the last platform to trial this approach. Advertising in games has existed for years, 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 other publishers to follow, ultimately making video games more affordable and accessible for everyday gamers.