Virginie Chesnais serves as the chief marketing officer at Happydemics, an analytics platform focused on advertising technology. For many years, gamers have approached in‑game advertising with suspicion, and the wariness is understandable. The reputation of ads in video games is mixed at best; players often encounter redirects to unrelated websites or apps, misleading content, and close buttons that are difficult to locate, all of which fuel frustration. A recent study conducted by eMarketer highlighted that 52 % of gamers would abandon a session if they ran into several intrusive ad elements.
Losing half of an audience at the moment you are trying to engage them is hardly a winning tactic. Nevertheless, advertising does not have to be a negative experience.
The same research revealed that one in five gamers would actually increase the frequency with which they play a title if the in‑game advertisements were of a high quality and felt relevant. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming continuing to climb, well‑crafted ads could find a natural home within the medium.
The argument for a hybrid "ads‑for‑games" model is more compelling than many anticipate, and it has already been validated to some degree by linear media. Services such as Netflix, Disney+, and other streaming platforms demonstrate that a steady revenue stream can be generated by offering both ad‑free and ad‑supported tiers. Should Xbox’s experiment succeed, it would not only preserve its subscriber base but also unlock a previously untapped source of income at a moment when the brand is eager for fresh cash flow. This development matters because console gaming is increasingly being positioned as a premium offering.
Prices for games, consoles, accessories, and downloadable content have risen steadily, turning gaming into a financial hurdle for the average consumer. Xbox itself has stated that, when executed correctly, advertising can lower the barrier to entry for gamers.
Mobile gaming has already shown that ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases. Crucially, the system would remain optional.
Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those willing to view ads could access the same content at a reduced cost. By providing a two‑tiered structure, Xbox aims to keep its loyal fan base happy while simultaneously widening its reach to newcomers. Although we lack concrete survey data on this specific launch, it is reasonable to assume that a majority of gamers would tolerate a 30‑second commercial if it meant they could play a beloved title or a new release for an hour.
Xbox likely has internal data that supports this hypothesis. Happydemics analyzed 285 in‑game campaigns across the United Kingdom and North America and found that in‑game advertisements consistently outperformed television, social media, and other online formats in terms of recall and attribution.
In other words, players are more likely to remember an ad they saw while gaming and correctly associate it with the brand that displayed it. Xbox’s "around‑the‑game" approach—showing ads before a session starts rather than embedding them within the gameplay—adds another layer of interest.
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 matters because, while we may remember a commercial that pops up during a TV show or a scroll through a social feed, we do not always link that memory to the brand behind it.
Gaming appears to create a stronger connection between the ad and the advertiser, which likely explains why companies such as Xbox and EA are increasingly exploring ad‑based models. It is also worth noting that Xbox’s ads are not meant to be intrusive.
By delivering them before the game begins, the platform aims to preserve the immersive experience that gamers cherish. This approach benefits both players—who avoid interruptions during gameplay—and advertisers, who want their messages to be part of the experience rather than a disruption.
Relevance will be key. No one enjoys seeing 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 will help Xbox keep players from abandoning a session at the sight of an irrelevant commercial, while simultaneously giving brands a premium venue to reach new audiences. Nevertheless, Xbox is venturing into largely 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 over the long term.
The decision to explore ad‑supported streaming reflects a bold strategy by Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment and take calculated risks. Only time will reveal whether this gamble pays off.
Historically, many gaming ad campaigns have been built around a "watch an ad, earn an extra life" premise. Xbox’s proposal is different: it asks players to watch an ad in order to access a game they already own.
Our existing data set does not yet show how this particular trade‑off will be received. Research on ad‑format perception does offer some guidance. When participants were asked to describe the formats they remembered, terms such as "non‑intrusive" and "immersive" ranked among the most popular.
If Xbox—and any future adopters—aim to make advertising a lasting part of gaming, these two attributes will be essential metrics to monitor. My forecast is that Xbox will not be the sole pioneer of this model; other companies are likely to test similar concepts. Advertising in games has existed for years, but it has rarely been designed with the player’s experience as the primary focus.
Should Xbox succeed in balancing revenue generation with a respectful, player‑centric ad experience, it could pave the way for a new era of accessible gaming, benefitting both developers and everyday gamers alike.