Virginie Chesnais serves as chief marketing officer at the ad‑technology analytics firm Happydemics. While many gamers have traditionally been skeptical of advertisements embedded in games, that wariness is not without cause. Historically, in‑game ads have suffered from a patchy reputation, often leading players to unwanted redirects, deceptive messaging, or poorly designed close‑buttons that are hard to locate.
A recent study by eMarketer highlighted that 52 % of respondents would abandon a game if they encountered multiple intrusive ad elements, indicating that losing half of an audience at the moment of engagement is far from an optimal approach. However, advertisements do 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 ads presented were of high quality and relevance. This insight aligns with Xbox’s current experimentation with an ad‑supported game‑streaming service, especially as the overall cost of playing continues to climb. High‑caliber, well‑targeted ads could therefore find a receptive home within the gaming ecosystem.
The rationale for introducing an ad‑for‑games model is more compelling than many anticipate, and it has already been demonstrated to some degree in linear media. Services such as Netflix, Disney+, and other streaming platforms have shown that offering both ad‑free and ad‑supported tiers can generate substantial revenue while expanding audience reach. If Xbox’s pilot proves profitable, it could not only preserve its subscription base but also unlock a fresh, previously untapped income stream—something the brand could greatly benefit from at this juncture. This development matters because console gaming is increasingly being positioned as a premium product.
The price tags attached to games, consoles, accessories, and downloadable content are rising steadily, creating a financial barrier for the average player. Xbox itself has stated that, when executed correctly, advertising can lower the entry cost for gamers. Mobile gaming already provides a clear precedent: ad‑supported tiers allow players to engage with titles without paying large upfront fees, opening the market to a broader demographic. Crucially, the model remains optional.
Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads, while those who are price‑sensitive can opt into the ad‑supported tier. By offering a two‑tier system, Xbox hopes to retain its loyal fan base while simultaneously making games more accessible to newcomers.
Although specific survey data on Xbox’s new approach are not yet available, it is reasonable to assume that the majority of gamers would tolerate a brief 30‑second commercial if it granted them an hour of gameplay in a favorite or newly released title. Happydemics’ analysis of 285 in‑game campaigns across the UK and North America confirms that in‑game advertising consistently outperforms television, social, and online ads in terms of recall and attribution. Players are more likely to remember and correctly associate a brand with an ad they encounter while gaming.
Xbox’s “around‑the‑game” strategy—showing ads before the gameplay begins rather than during the session—adds another layer to this picture. Our data indicate that pre‑game placements generate higher recall and attribution scores compared with ads that appear within the game world. This distinction is important because, while we may recall an ad seen on TV or scrolling through a social feed, we do not always connect it to the sponsoring brand.
Gaming appears to be a unique environment where ad memory and brand linkage are stronger, which likely explains why companies such as EA and Xbox are exploring ad‑based models. It is also worth noting that Xbox’s ads are not embedded in the gameplay itself; they are displayed beforehand. 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 combines pre‑game and in‑game ads could theoretically offer the best of both worlds for advertisers, though it might also provoke greater resistance from players who value uninterrupted immersion. Xbox has pledged that its advertisements will be non‑intrusive.
By placing ads before the game launches, the company aims to preserve the immersive experience once play begins. This approach benefits both gamers—who avoid disruptions during gameplay—and advertisers, who want their messages to be part of the experience rather than a nuisance. Relevance will be key.
No player wants to see an ad for cat food when they do not own a cat, or an advertisement for a game they have already completed. Contextual, well‑targeted ads that provide genuine value will help ensure that players do not abandon the session at the sight of an ad, while giving brands an effective platform to reach new audiences. Nevertheless, Xbox is navigating uncharted territory.
The first unknown is how gamers will react to pre‑game advertising; 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, risk‑taking mindset from Xbox CEO Asha Sharma, but only time will reveal whether the strategy delivers the intended results.
Historically, many gaming ad models have relied on “watch an ad, earn an extra life” mechanics. Xbox’s proposal differs: it asks players to watch an ad in order to access a game they already own.
Our existing 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 future adopters aim to succeed, they will need to prioritize these attributes. My forecast is that Xbox will neither be the first nor the last platform to test this kind of model.
Advertising in games has existed for years, but it has rarely been implemented with the player’s experience at the forefront. Should Xbox manage to strike the right balance, it could pave the way for other developers and publishers to follow suit, ultimately making video games more affordable and accessible for the everyday gamer.