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 the wariness is understandable. The reputation of ads in video games is mixed: they often redirect users to unrelated sites or apps, present misleading content, or feature hide‑away close buttons that frustrate players. A recent study by eMarketer revealed that 52 % of gamers would stop playing if they encountered several disruptive ad elements.
Losing half of an audience at the very moment you’re trying to engage them is hardly a winning tactic. However, ads do not have to be a negative experience. The same research indicated that one in five gamers would actually increase the frequency with which they played a title if the in‑game advertisements were of high quality and relevance. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of playing continuing to climb, well‑crafted ads could find a natural home within the gaming ecosystem.
The argument for a hybrid "ads‑for‑games" model is more compelling than many anticipate, especially when we look at the success of linear media platforms. Services such as Netflix, Disney+ and other streaming giants 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 prove profitable, it would not only preserve its existing paying members but also unlock a brand‑new, previously untapped income stream at a moment when the company could use the cash flow. This development matters because console gaming is increasingly positioned as a premium product. Prices for games, consoles, accessories, and downloadable content keep rising, making it harder for the average consumer to justify the expense. Xbox itself has acknowledged that, when executed correctly, advertising can lower the barrier to entry and make gaming more accessible.
The mobile‑gaming sector already offers a precedent: ad‑supported tiers let players join without paying large upfront fees, instead tolerating short commercial breaks in exchange for free play. Importantly, the proposed system would be optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads, while those willing to tolerate a brief commercial could enjoy a lower‑cost or even free option. By providing a two‑tiered approach, Xbox hopes to keep its loyal fan base satisfied while simultaneously attracting newcomers who might otherwise be deterred by high costs.
Although formal survey data on this specific rollout are not yet available, it is reasonable to assume that most gamers would accept a 30‑second advertisement if it granted them an hour of gameplay on a beloved or new title. Happydemics’ own data, drawn from 285 in‑game campaigns across the UK and North America, show that in‑game ads consistently outperform television, social, and other online formats in terms of recall and accurate brand attribution. In other words, players are more likely to remember an ad they saw while gaming and correctly associate it with the sponsoring brand.
Xbox’s "around‑the‑game" strategy—showing ads before the game launches rather than embedding them within the gameplay—adds another layer of interest. Our research indicates that pre‑game placements achieve higher recall and attribution scores compared with intrinsic in‑game spots. This distinction matters because while we can often recall ads seen on TV or scrolling through social feeds, we do not always link those impressions to the correct brand. Gaming appears to occupy a unique niche where ad recall translates more directly into brand awareness, which explains why companies like Xbox and EA are increasingly exploring ad‑based models.
It is essential to note that Xbox’s advertisements are planned to be pre‑game, not in‑game. Traditional in‑game ad formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and likeability. A hybrid approach that blends both 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 are sensitive to interruptions. Xbox has pledged that its ads will be non‑intrusive.
By placing commercials before the actual gameplay begins, the company aims to preserve the immersive experience that gamers value. This approach benefits both the player—who enjoys an uninterrupted session—and the advertiser, who wants their message to be part of the experience rather than a disruptive nuisance.
Relevance will be key. 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, well‑targeted ads that make sense to the individual player will help prevent users from abandoning the session at the first sign of an irrelevant commercial, while simultaneously giving brands a highly effective platform to reach fresh audiences. Nonetheless, Xbox is venturing into largely uncharted territory.
The first unknown is how players will actually respond to pre‑game adverts; the second is whether the revenue generated will be sufficient to sustain the model over the long term. The move to explore ad‑supported game streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who appears willing to experiment with new revenue mechanisms. Only time will reveal whether the strategy delivers the desired outcomes. Historically, our work in gaming advertising has focused on "watch an ad, earn an extra life" type incentives.
Xbox’s proposition differs: players would watch an ad to access a game they already own, rather than receiving a direct in‑game reward. Our data set does not yet indicate how this will be received, but broader research on ad‑format perception shows that descriptors such as "non‑intrusive" and "immersive" rank highly among positive responses.
If Xbox—and potentially other platforms in the future—aim to make gaming ads a success, these two attributes will be critical metrics to monitor. In my view, Xbox will neither be the first nor the last company to trial such a model.
Advertising has existed in games for many 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 gaming companies to adopt similar strategies, ultimately making video games more affordable and reachable for everyday gamers.