Virginie Chesnais serves as the chief marketing officer at Happydemics, an analytics platform focused on advertising technology. For many years, gamers have been skeptical of advertisements that appear within games, and their concerns are not unfounded. The reputation of in‑game ads is mixed, often plagued by issues such as redirects to unrelated websites or apps, misleading content, and hard‑to‑find close buttons that frustrate users.
A recent study conducted by eMarketer highlighted that 52 % of players would abandon a session if they encountered several intrusive ad elements. Losing half of an audience at the very moment you are trying to engage them is hardly an effective approach.
Nevertheless, advertisements do 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 high quality and relevance.
With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming continuing to climb, well‑crafted advertisements could find a receptive home within the gaming ecosystem. The argument for a "ads‑for‑games" model is more compelling than many anticipate, and it is already supported by evidence from linear media. Services such as Netflix, Disney+, and other streaming platforms have demonstrated that offering both ad‑free and ad‑supported tiers can generate substantial revenue while keeping a broad subscriber base. Should Xbox’s experiment succeed, it would not only preserve revenue from existing subscription customers but also unlock a completely new, previously untapped income stream—something the brand could use heavily at this juncture.
This development matters because console gaming is increasingly being positioned as a premium experience. Prices for games, consoles, peripherals, and downloadable content have all risen, making it harder for the average consumer to justify the expense.
The result is a growing barrier that keeps many potential players on the sidelines. Xbox itself has stated that, when executed correctly, advertising can lower the cost of entry to gaming.
Mobile gaming already offers a clear precedent: ad‑supported tiers allow players to experience games without paying large upfront fees, opening the market to a wider audience. Importantly, the approach remains optional. Users who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads.
By offering a two‑tier system—ad‑supported and ad‑free—Xbox hopes to keep its loyal fan base while simultaneously making games more accessible to newcomers. Although there is currently no public survey data on this specific rollout, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second commercial if it meant gaining an hour of gameplay on a favorite or new title. Xbox’s internal data likely confirms this hypothesis. Happydemics analyzed 285 in‑game campaigns across the United Kingdom and North America and found that in‑game advertisements consistently outperformed TV, social, and other online formats in terms of ad recall and attribution.
Players were more likely to remember the brand behind an ad that appeared within a game and to correctly associate the ad with that brand. Xbox’s "around‑the‑game" strategy—showing ads before the gameplay begins rather than embedded within the experience—adds another layer of advantage. Our data indicate that pre‑game placements generate higher recall and attribution scores compared with ads that appear directly inside the game world.
This distinction is crucial because while consumers may remember an ad they saw on television or scrolling through a feed, they do not always link that ad to a specific brand. Gaming, by contrast, seems to create a stronger mental connection between the ad and its sponsor, which likely explains why companies like Xbox and EA are increasingly exploring ad‑based monetisation models. It is also worth noting that Xbox’s ads are not in‑game but pre‑game.
Traditional in‑game formats tend to excel further down the marketing funnel, delivering stronger lifts in brand image, consideration, interest, and likability. A hybrid model that combines both pre‑game and in‑game placements could offer advertisers the best of both worlds, though it may also provoke greater resistance from players who are sensitive to interruptions. Xbox has promised that any advertisements will be non‑intrusive.
By placing them before the game starts, they avoid breaking the immersive flow that players value. This approach benefits both the audience—who enjoys an uninterrupted session—and advertisers, who want their messages to be part of a positive experience rather than a disruption.
Relevance will be another key factor. 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, targeted ads that make sense for the player will reduce the likelihood of users abandoning the session and will give brands a more effective platform for reaching new demographics.
Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to a steady stream of 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 game 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 this gamble pays off. Historically, many gaming ad campaigns have relied on a "watch an ad, earn an extra life" mechanic.
Xbox’s proposal differs: players would watch an ad to gain access to a game they already own, a scenario not yet captured in our data sets. However, broader research on ad‑format perception indicates that when respondents recall an ad, they tend to describe the format as "non‑intrusive" and "immersive"—the two most frequently cited positive attributes.
If Xbox and future adopters aim to make gaming ads successful, these two metrics will be essential to monitor. My forecast is that Xbox will neither be the first nor the last platform to test such a model. Advertising within 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 reachable for everyday gamers.