Virginie Chesnais serves as the chief marketing officer at Happydemics, a platform that specializes in ad‑tech analytics. For many years, gamers have been skeptical of advertisements that appear within games, and their concerns are not unfounded.
The reputation of in‑game ads is mixed, often plagued by issues such as redirects to unrelated websites or apps, misleading content, and poorly designed close buttons that are hard to locate. These annoyances have contributed to a general wariness toward any form of marketing that interrupts gameplay.
A recent study conducted by eMarketer highlighted the severity of the problem: more than half—52 percent—of respondents said they would stop playing a title if they encountered several disruptive advertising elements. Losing half of an audience at the moment you are trying to engage them is hardly an effective tactic. However, the same research also revealed a silver lining: one in five gamers indicated they would actually increase the frequency with which they played a game if the in‑game advertisements were of high quality and well integrated. This insight is especially relevant now that Xbox is piloting an ad‑supported game‑streaming service, at a time when the overall cost of gaming continues to climb.
If the advertisements can be delivered in a tasteful, non‑intrusive manner, they could find a receptive home within the gaming ecosystem. The argument for introducing an "ads‑for‑games" model is stronger than many industry observers might assume, and it is already supported by evidence from linear media. Services such as Netflix, Disney+, and other streaming platforms have demonstrated that a hybrid approach—offering both ad‑free subscriptions and lower‑cost ad‑supported tiers—can generate significant revenue while expanding the audience base. Should Xbox’s experiment succeed, it would not only preserve its existing subscriber base but also unlock a fresh, previously untapped source of income—something the brand could greatly benefit from in the current market climate.
Console gaming is increasingly being positioned as a premium experience. Prices for new titles, hardware, accessories, and downloadable content have risen steadily, making it harder for the average consumer to justify the expense.
This price pressure creates a barrier that keeps many potential players on the sidelines. Xbox itself has acknowledged that, when executed correctly, advertising can reduce the cost of entry for gamers. Mobile gaming has already proven that ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases.
Crucially, the proposed system would remain entirely optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those who are more price‑sensitive could opt into the ad‑supported tier. By offering a two‑track model, Xbox hopes to keep its loyal fan base satisfied while simultaneously attracting newcomers who might otherwise be deterred by high upfront costs. Although there is no concrete survey data on the latest Xbox announcement, it is reasonable to assume that a large majority of gamers would tolerate a brief 30‑second commercial if it meant gaining an hour of gameplay on a favorite or newly released title.
Xbox’s internal analytics are likely to confirm this hypothesis. Data from Happydemics, covering 285 in‑game campaigns across the United Kingdom and North America, consistently show that in‑game advertisements outperform traditional TV, social, and online ads in terms of recall and attribution.
Players are more likely to remember an ad they saw while playing and correctly associate it with the sponsoring brand. Xbox’s “around‑the‑game” strategy—placing ads just before a game starts rather than embedding them within the gameplay—adds another layer of appeal. Our research indicates that pre‑game placements generate higher recall and attribution scores compared with ads that appear during the game itself. This distinction matters because, while people may notice ads on television or social feeds, they do not always link those impressions to a specific brand.
Gaming appears to occupy a unique niche where ad recall is especially strong, which may explain why companies like Xbox and EA are increasingly exploring ad‑based revenue models. It is important to note that Xbox’s ads will not interrupt the actual gameplay; they will be shown beforehand. In‑game ad formats tend to excel further down the marketing funnel, delivering stronger lifts in brand image, consideration, interest, and likeability. A combined approach—leveraging both pre‑game and in‑game ads—could offer advertisers the best of both worlds, though it also risks provoking greater resistance from players who are sensitive to any form of advertising.
Xbox has pledged that the ads will be non‑intrusive. By delivering them before the game launches, the company aims to preserve the immersive experience that gamers value. This approach benefits both players, who enjoy an uninterrupted session, and advertisers, who want their messages to be part of the experience rather than a disruption.
Relevance will be key. Nobody wants to see an advertisement for cat food if they don’t own a cat, or a promotion for a game they have already completed. By ensuring that ads are contextually appropriate and provide a clear rationale for being shown, Xbox can keep players from abandoning the session at the sight of an irrelevant commercial, while giving brands an effective platform to reach new audiences. Nevertheless, Xbox is venturing into largely uncharted territory.
The company must gauge player reaction to pre‑game ads and determine whether the revenue generated will be sufficient to sustain the model over the long term. The move to an ad‑supported streaming service reflects the bold, risk‑taking attitude of Xbox CEO Asha Sharma, who appears willing to experiment with new monetisation strategies. Only time will reveal whether this gamble pays off.
Historically, many gaming ad campaigns have relied on simple "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 show how this particular exchange will be received.
However, broader research on ad format perception indicates that descriptors such as "non‑intrusive" and "immersive" are among the most positively received. If Xbox—and potentially other platforms in the future—can deliver ads that meet these criteria, they will be well positioned for success. My forecast is that Xbox will not be the first nor the last company to test this model.
Advertising in games has existed for years, but it has rarely been implemented with the player’s experience as the primary focus. Should Xbox manage to strike the right balance, it could pave the way for similar initiatives across the industry, ultimately making video games more affordable and accessible for everyday gamers.