Virginie Chesnais serves as the chief marketing officer at Happydemics, an analytics platform that focuses on advertising technology. For many years, gamers have approached in‑game advertising with suspicion, and their wariness is understandable.
The reputation of ads in the gaming sphere is mixed at best, often plagued by issues such as redirects to unrelated sites or apps, misleading content, and close buttons that are difficult to locate—all of which frustrate players. A recent study conducted by eMarketer highlighted that 52 percent of gamers would stop playing if they encountered a series of disruptive advertisements. Losing half of an audience at the very moment you are trying to engage them is hardly a winning tactic.
However, advertising does not have to be synonymous with annoyance. 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 rise, well‑crafted advertisements could find a natural home within the medium. The argument for incorporating some form of ad‑for‑games arrangement is stronger than many assume, especially when we look at the success of linear media models. Services such as Netflix, Disney+, and other streaming platforms have demonstrated that offering both subscription‑only and ad‑supported tiers can generate substantial revenue while keeping a broad audience base.
Should Xbox’s experiment prove viable, it could not only preserve its existing subscriber base but also unlock a fresh, previously untapped stream of income—a development the company could certainly use at this stage. This issue is increasingly pertinent because console gaming is evolving into a premium experience.
The price tags attached to new games, consoles, accessories, and downloadable content are climbing, making it harder for the average consumer to justify the expense. This creates a 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. The mobile gaming sector already offers a glimpse of how ad‑supported tiers can open the door for players who are reluctant or unable to make large upfront purchases. Importantly, participation would be optional.
Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those willing to tolerate brief commercials could enjoy a reduced‑price or free tier. By presenting a two‑tier model, Xbox aims to keep its loyal fan base satisfied while simultaneously making games more approachable for newcomers.
Although we lack concrete survey data on this specific rollout, it is reasonable to assume that a large majority of gamers would accept a 30‑second advertisement in exchange for an hour of gameplay on a favorite or newly released title. Xbox likely has internal data supporting this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America indicates that in‑game advertisements consistently outshine TV, social, and standard online ads in terms of recall and attribution.
Players tend to remember these ads better and correctly associate them with the brands that displayed them. This advantage becomes even more pronounced when ads are placed "around the game"—for example, before the gameplay begins—rather than embedded within the game world.
Our data show that these pre‑game formats generate higher recall and attribution scores compared with intrinsic in‑game placements. The distinction matters because, while we might recall an ad we saw while scrolling through a social feed, we do not always link that ad to a specific brand.
Gaming, however, appears to occupy a unique niche where recall translates more directly into brand recognition. This is likely why companies like Xbox and EA are increasingly exploring ad‑based gaming models.
It is crucial to note that Xbox’s plan focuses on pre‑game ads, not intrusive in‑game pop‑ups. In‑game formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and overall likability.
A hybrid approach—combining both pre‑game and in‑game ads—could theoretically offer advertisers the best of both worlds, but it also risks greater pushback from players who value an uninterrupted experience. Xbox has emphasized that the advertisements will be non‑intrusive. By placing ads before the game starts, the company aims to preserve the immersive quality of the gameplay itself.
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 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 an ad for a game they have already completed. Contextual, targeted ads that make sense for the individual player will help prevent users from abandoning the session at the sight of an irrelevant commercial, while also giving brands a highly effective platform to reach new audiences.
Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to this new ad format; the second is whether the revenue generated will be sufficient to justify a long‑term commitment to the model.
The move toward ad‑supported game streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has shown a willingness to experiment with innovative ideas. Only time will reveal whether this gamble pays off. Historically, many of our gaming‑ad projects have revolved around "watch an ad, get an extra life" mechanics. Xbox’s proposal, however, asks players to watch an ad simply to access a game they already own.
Our existing data set does not yet indicate how this will be received. Research on ad format perception—where respondents who recall an ad are asked to describe it using positive adjectives—has consistently highlighted "non‑intrusive" and "immersive" as top descriptors. If Xbox and future industry players want to make advertising a staple of gaming, these two qualities will be essential to monitor.
My forecast is that Xbox will neither be the first nor the last platform to trial such a strategy. Advertising in games is not new, but it has rarely been implemented with the player’s experience as the primary focus.
Should Xbox succeed, it could pave the way for other developers and publishers to adopt similar models, ultimately making video games more affordable and accessible for the everyday gamer.