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 that wariness is understandable.
The reputation of ads in video games is mixed; players often encounter redirects to unrelated websites or apps, deceptive messaging, or hide‑away close buttons that are difficult to locate, all of which lead to frustration. A recent study by eMarketer highlighted that 52 % of gamers would abandon a session if they ran into multiple disruptive 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 a nuisance.
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 high‑quality and unobtrusive. With Xbox currently piloting a new ad‑supported game‑streaming service and the overall cost of playing continuing to climb, premium‑grade ads could find a welcoming niche within the gaming ecosystem. The argument for a hybrid “ads‑for‑games” model is more compelling than many anticipate, and it is already partially validated by the success of linear media. Services such as Netflix, Disney+, and other streaming platforms have demonstrated that offering an ad‑supported tier can generate significant revenue while still delivering a reliable experience.
Should Xbox’s experiment prove viable, it would not only preserve its existing subscriber base but also unlock a fresh, previously untapped source of income at a moment when the brand is eager for new cash flows. This development matters because console gaming is increasingly positioning itself as a premium offering. Prices for games, consoles, accessories, and downloadable content have risen sharply, creating a financial hurdle for the average player. Xbox itself has stated that, when executed correctly, advertising can lower the barrier to entry for gamers.
The mobile‑gaming sector already shows that ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases. Importantly, the model remains optional. Players who prefer an ad‑free experience can continue to pay a subscription fee, while those who are comfortable with occasional ads can enjoy a reduced cost. By presenting a two‑tier system, Xbox hopes to keep its loyal fan base happy while simultaneously making games more approachable for newcomers.
Although concrete survey data on this specific announcement are not yet available, it is reasonable to assume that most gamers would tolerate a 30‑second commercial if it meant gaining an hour of playtime on a favorite or brand‑new title. Xbox likely has internal data supporting that assumption.
Happydemics’ analysis of 285 in‑game campaigns across the UK and North America reveals that in‑game advertisements consistently outperform TV, social, and other online formats in terms of ad recall and attribution. In other words, players are more likely to remember an ad they see while gaming and correctly associate it with the sponsoring brand. This is where Xbox’s “around‑the‑game” strategy—ads that appear before the gameplay begins rather than embedded within the game world—becomes intriguing. Our data indicate that pre‑game placements generate a clear advantage in recall and attribution when compared with intrinsic in‑game spots.
The distinction matters because, while we may notice ads on television or scrolling through feeds, those impressions do not always translate into a strong brand connection. Gaming, by contrast, appears to sit in a league of its own for creating memorable brand associations, which likely explains why companies such as Xbox and EA are exploring ad‑based models more aggressively. It is essential to note that Xbox’s ads are not woven into the gameplay itself; they are shown beforehand.
Traditional in‑game formats tend to excel further down the funnel, delivering higher lifts in brand image, consideration, interest, and likeability. A combined approach—leveraging both pre‑game and in‑game ads—could theoretically offer advertisers the best of both worlds, though it also risks greater pushback from players who value an uninterrupted experience. Xbox has pledged that the ads will be non‑intrusive. By placing commercials before the game starts, the company aims to preserve the immersive nature of the session.
This is a critical consideration for both gamers, who want uninterrupted play, and advertisers, who desire their messages to be part of the experience rather than a disruption. Relevance will be another key factor.
No one wants to see a promotion for cat food when they don’t own a cat, or an advertisement for a game they have already completed. By delivering contextual, well‑targeted ads, Xbox can keep players from abandoning the session while giving brands an effective platform to reach new audiences. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how players will react to these pre‑game spots; the second is whether the revenue generated will be sufficient to sustain the model over the long term. The decision to explore ad‑supported game streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has shown a willingness to experiment with new business models. Whether this gamble pays off remains to be seen. Historically, many of our gaming‑ad campaigns have revolved around “watch an ad, earn an extra life” mechanics.
Xbox’s proposal is different: it asks players to watch an ad to access a game they already own. Our existing data set does not yet reveal how this will be received. However, broader research on ad‑format perception indicates that descriptors such as “non‑intrusive” and “immersive” rank among the most positively received.
If Xbox—and potentially other platforms in the future—aim to make advertising a staple of gaming, these two metrics will be essential to monitor. My forecast is that Xbox will neither be the first nor the last to trial this approach. Advertising in games has existed for years, but it has rarely been designed with the player’s experience at the forefront. Should Xbox succeed, it could pave the way for similar initiatives across the industry, ultimately making video games more affordable and accessible for the everyday gamer.