Virginie Chesnais serves as Chief Marketing Officer at the ad‑tech analytics firm Happydemics. While gamers have historically been skeptical of advertisements embedded in games, their distrust is not unfounded. Common complaints include redirects to unrelated websites or apps, misleading content, and the inability to locate a close button, all of which can ruin the experience. A recent study 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 moment you are trying to engage them is hardly an effective approach. Nevertheless, advertisements do not have to be detrimental. The same research indicated 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. With Xbox currently piloting an ad‑supported game‑streaming service amid a steady climb in the cost of playing, well‑crafted ads could find a receptive home in the gaming ecosystem.
The argument for a hybrid "ads‑for‑games" model is more compelling than many assume, as linear media has already demonstrated its viability. Services such as Netflix, Disney+, and other streaming platforms have proven that offering both ad‑free and ad‑supported tiers can generate significant revenue while retaining subscribers.
Should Xbox’s experiment succeed, it would not only preserve its paying user base but also unlock a fresh, previously untapped income stream—a development the brand could greatly benefit from at this juncture. This is crucial because console gaming is increasingly positioned as a premium offering. Prices for games, hardware, accessories, and downloadable content continue to rise, making it harder for the average consumer to justify the expense and erecting a barrier to entry for casual gamers. Xbox itself has stated that, when executed correctly, advertising can lower the cost of accessing games.
Mobile gaming already illustrates how ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases. Importantly, participation would be optional.
Players who prefer an ad‑free experience could continue to do so by paying a subscription fee. By presenting a two‑tier system, Xbox hopes to keep its loyal community while simultaneously expanding accessibility for newcomers.
Although no formal survey data exists on this specific rollout, it is reasonable to predict that a large majority of gamers would tolerate a 30‑second commercial if it granted them an hour of gameplay on a favorite or new title. Xbox’s own analytics are likely to confirm this hypothesis. Happydemics data drawn from 285 in‑game campaigns across the United Kingdom and North America reveal that in‑game advertisements consistently outperform television, social media, and other online formats in terms of recall and attribution. Players are more likely to remember an ad they saw while gaming and to correctly associate it with the brand that displayed it.
This is where Xbox’s "around‑the‑game" strategy—ads placed outside the actual gameplay, such as pre‑game slots—becomes intriguing. Our research shows that these peripheral placements generate higher recall and attribution scores compared with ads embedded directly within the game environment. The distinction matters because, while we might recall a commercial seen on TV or a sponsored post while scrolling, that memory does not always translate into a clear brand connection. Gaming appears to occupy a unique position in this regard, which may explain why companies like Xbox and EA are increasingly exploring ad‑based models.
It is essential to note that Xbox’s ads would be pre‑game rather than in‑game. In‑game formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and likability. A blended approach—combining pre‑game and in‑game placements—could offer advertisers the best of both worlds, though it might also provoke greater resistance from players.
Xbox has pledged that the ads will not be intrusive. By positioning commercials before the game starts, the immersive experience remains uninterrupted.
This consideration benefits both the player, who retains focus on the gameplay, and the advertiser, who wants their message to complement rather than disrupt the experience. Relevance will be another key factor.
No gamer wants to see an advertisement for cat food when they do not own a cat, or for a game they have already completed. Contextual, targeted ads that provide genuine value can prevent players from abandoning the session and give brands an effective platform to reach new audiences. Nonetheless, Xbox is navigating uncharted waters.
The first unknown is how players will react to the presence of ads; the second is whether the revenue generated will justify making the model a permanent feature. The decision to explore ad‑supported game streaming reflects a bold strategy by Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with unconventional ideas.
Only time will reveal whether this gamble pays off. Historically, our work in gaming advertising has centered on "watch an ad, get an extra life" type incentives. Xbox, however, is asking 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. Related research on ad‑format perception—where participants who recall an ad are asked to describe the format—has consistently highlighted "non‑intrusive" and "immersive" as the most favored descriptors. If Xbox and future adopters aim to make gaming ads successful, these two attributes will be critical metrics to monitor.
My forecast is that Xbox will neither be the first nor the last to test such a model. Advertising in games has existed for years, but seldom with the player experience at the forefront. Should Xbox manage to integrate ads in a way that feels natural and beneficial, it could pave the way for other companies to follow, ultimately making video games more affordable and accessible for the everyday gamer.