Virginie Chesnais serves as the chief marketing officer for Happydemics, an analytics platform that focuses on advertising technology. For many years, gamers have approached in‑game advertising with suspicion, and that wariness is not unfounded.
The reputation of ads within games is mixed at best: users often encounter redirects to unrelated websites or apps, misleading content, or tiny close buttons that are hard to locate, all of which contribute to frustration. A recent study conducted by eMarketer highlighted that 52 % of gamers would abandon a session if they ran into multiple disruptive advertising elements. Losing half of an audience at the moment you are trying to engage them is hardly an effective strategy.
However, advertisements do not have to be synonymous with annoyance. The same research indicated that one in five players would actually increase the frequency with which they play a title if the in‑game ads were of a high standard. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of playing continuing to climb, there is a genuine opportunity for well‑crafted ads to find a receptive home inside the gaming ecosystem.
The argument for introducing an "ads‑for‑games" model is more compelling than it might initially appear, especially when we look to linear media for precedent. Services such as Netflix, Disney+, and other streaming platforms have demonstrated that offering both ad‑free and ad‑supported tiers can generate substantial revenue while still delivering a consistent user experience. Should Xbox’s experiment prove successful, it would not only preserve its existing subscription base but also unlock a previously untapped source of income—a boon the brand could certainly use at this juncture. The relevance of this development stems from the fact that console gaming is increasingly positioning itself as a premium offering.
Prices for games, consoles, accessories, and downloadable content keep rising, making it harder for the average consumer to justify the expense. This creates a barrier that deters many potential players from entering the market. Xbox itself has acknowledged that, when executed correctly, advertising can lower the cost of access to gaming experiences.
Mobile gaming has already shown that ad‑supported tiers can provide an entry point for players who are unwilling or unable to make large upfront purchases. Crucially, any advertising model Xbox adopts would be optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads, while those who are comfortable with occasional commercials could enjoy a lower‑cost option. By offering a two‑tier system, Xbox aims to keep its loyal fan base satisfied while simultaneously making games more approachable for newcomers.
Although there is no concrete survey data on this specific announcement yet, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second ad if it meant gaining access to a beloved title or trying out a brand‑new game for an hour. Xbox likely has internal data supporting this hypothesis. Happydemics has analyzed 285 in‑game campaigns across the United Kingdom and North America and found that in‑game advertisements consistently outperform television, social media, and other online formats when it comes to ad recall and attribution.
In other words, players are more likely to remember an ad they saw within a game and correctly associate it with the sponsoring brand. This advantage becomes even more pronounced with "around‑the‑game" placements—ads that appear before the gameplay starts rather than being embedded within the game world. Our data indicate that these pre‑game formats deliver a clear edge in both recall and attribution compared with intrinsic in‑game placements.
Why does this matter? While we can often recall ads we encounter while watching TV or scrolling through feeds, those memories do not always translate into a clear brand association. Gaming appears to occupy a unique niche where ad recall and brand linkage are significantly stronger, which likely explains why companies such as Xbox and EA are increasingly exploring ad‑based gaming models.
It is essential to note that Xbox’s ads would not be intrusive in‑game interruptions; they would appear before the game begins. Traditional in‑game ad formats tend to excel further down the marketing funnel, boosting brand image, consideration, interest, and likeability. A hybrid approach that combines both pre‑game and in‑game ads could theoretically provide advertisers with the best of both worlds, though it also risks provoking greater pushback from players who are sensitive to any form of advertising.
Xbox has pledged that the ads will be non‑intrusive, meaning they will be shown before the actual gameplay starts, preserving the immersive experience that gamers value. This approach benefits not only the players—who can enjoy uninterrupted sessions—but also the advertisers, who want their messages to be part of the experience rather than a disruption. Relevance will be key.
No gamer wants to see an advertisement for cat food when they don’t own a cat, or a promotion for a game they have already completed. By delivering contextual, well‑targeted ads, Xbox can keep players from abandoning a session while providing brands with a premium platform to reach new audiences. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how players will react to pre‑game advertising, and the second is whether the revenue generated will be sufficient to sustain the model over the long term. The move to test ad‑supported game streaming reflects the boldness of Xbox CEO Asha Sharma, who has shown a willingness to experiment and take calculated risks. Only time will reveal whether this strategy will pay off. Historically, many gaming ad campaigns have relied on a "watch an ad, get an extra life" mechanic.
Xbox, however, is proposing that players watch an ad to gain access to a game they already own. Our existing data set does not yet provide insight into how this specific trade‑off will be perceived. Related research on ad format perception shows that when respondents are asked to describe ads they remember, terms like "non‑intrusive" and "immersive" frequently emerge as the most favorable descriptors.
If Xbox—and potentially other platforms in the future—aim to make advertising a successful component of gaming, these two attributes will be critical metrics to monitor. In my view, Xbox will not be the first nor the last company to experiment with this model.
Advertising within games has existed for 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 open the door for other developers and publishers to adopt similar strategies, ultimately making video games more accessible to everyday gamers worldwide.