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 interactive entertainment is mixed at best; players often encounter redirects to unrelated websites or apps, deceptive messaging, or tiny, hard‑to‑find close buttons that make the experience feel intrusive. A recent study by eMarketer highlighted that 52 % of gamers would abandon a session if they ran into multiple disruptive ad elements, indicating that losing half of an audience the moment you try to monetize them is far from an effective approach.
However, advertising does not have to be synonymous with irritation. 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 high quality and relevance. This suggests a market for well‑crafted, non‑intrusive advertising that adds value rather than detracts from enjoyment. With Xbox currently piloting an ad‑supported game‑streaming service amid a backdrop of steadily climbing costs for consoles, games, accessories, and downloadable content, the timing may be right for premium‑grade ads to find a receptive home in the gaming ecosystem.
The business case for a hybrid "ads‑for‑games" model is more compelling than many assume, especially when we look to linear media for precedent. Streaming giants such as Netflix, Disney+, and others have demonstrated that offering both ad‑free and ad‑supported tiers can generate substantial revenue while broadening audience reach. If Xbox’s experiment proves successful, it could not only preserve its subscription base but also unlock a brand‑new revenue stream at a moment when the company is seeking fresh sources of income.
This development matters because console gaming is increasingly positioned as a premium service. Prices for hardware, software, peripherals, and even microtransactions continue to climb, creating a financial hurdle for the average player.
Xbox itself has argued that, when executed correctly, advertising can lower the barrier to entry and make gaming more affordable. Mobile gaming already offers a clear illustration: ad‑supported tiers let players experience games without paying large upfront fees, relying instead on short video ads or rewarded offers.
Crucially, the model remains optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads, while those who are price‑sensitive can opt into the ad‑supported tier.
By presenting a two‑tier system, Xbox hopes to retain its loyal fanbase while simultaneously attracting newcomers who might otherwise be priced out. Although there is no specific survey data on Xbox's new approach yet, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second advertisement if it granted them an hour of gameplay in a beloved or new title. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that in‑game advertising consistently outperforms TV, social, and online ads in terms of recall and attribution.
Players are more likely to remember an ad they see while playing and correctly associate it with the sponsoring brand. Xbox’s “around‑the‑game” strategy—showing ads before the game starts rather than embedding them within the gameplay—adds another layer of advantage.
Our data indicate that pre‑game formats generate higher ad recall and attribution than intrinsic in‑game placements. This distinction matters because while we can often recall ads seen on television or scrolling through feeds, those memories do not always translate into brand association.
Gaming appears to occupy a unique niche where recall more readily leads to accurate brand linkage, which likely explains why companies like Xbox and EA are increasingly exploring ad‑based models. It is also worth noting that Xbox’s ads are not intended to be intrusive. By placing them before the gameplay begins, the experience remains uninterrupted once the player is immersed in the title. This approach benefits both gamers—who retain a seamless experience—and advertisers, who want their messages to complement rather than disrupt the user journey.
Relevance will be key. No player wants to see an advertisement for cat food when they don’t own a cat, or for a game they have already completed.
Contextual, targeted ads that align with a player’s interests can keep engagement high and reduce the risk of users abandoning the session at the sight of an irrelevant spot. Nevertheless, Xbox is venturing into relatively uncharted territory. The first unknown is how players will react to pre‑game advertising; the second is whether the revenue generated will be sufficient to sustain the model long‑term. Xbox CEO Asha Sharma’s willingness to experiment with ad‑supported streaming demonstrates a bold, risk‑taking mindset, but only time will reveal whether the strategy pays off.
Historically, many gaming ad formats have followed a "watch an ad, get an extra life" model, providing a direct in‑game reward for ad consumption. Xbox’s proposal differs: players would watch an ad to gain access to a game they already own, rather than receiving a tangible in‑game benefit.
Our existing data set does not yet capture how this shift will be perceived. Research on ad format perception does, however, offer some insight.
When participants who remembered an ad were asked to describe the format, "non‑intrusive" and "immersive" emerged as the most popular descriptors. If Xbox and future adopters aim to make advertising a staple in gaming, they will need to prioritize these qualities.
My forecast is that Xbox will neither be the first nor the last platform to test such a model. Advertising in games has existed for years, but it has rarely been designed with the player’s experience at the forefront. Should Xbox succeed in delivering ads that feel seamless, relevant, and optional, it could pave the way for other publishers to adopt similar strategies, ultimately making video games more accessible to a broader audience while opening new monetisation avenues for the industry.