Virginie Chesnais serves as the chief marketing officer at the ad‑technology analytics firm Happydemics. For many years, gamers have viewed in‑game advertising with suspicion, and their concerns are not unfounded. The reputation of ads in video games is mixed; players often encounter redirects to unrelated sites or apps, deceptive messaging, and hard‑to‑find close buttons, all of which generate frustration.
A recent study conducted by eMarketer revealed that 52 % of gamers would stop playing if they ran into several intrusive ad elements. Losing half of an audience at the moment you are trying to engage them is hardly an effective tactic.
Nevertheless, advertising does not have to be a negative experience. The same research indicated that one in five gamers would actually increase the frequency with which they play a title if the in‑game advertisements were of high quality and relevance. With Xbox presently piloting an ad‑supported game‑streaming service and the overall cost of gaming steadily climbing, premium‑grade ads could find a natural home within the gaming ecosystem.
The argument for a hybrid "ads‑for‑games" model is more compelling than many assume, and it has already been demonstrated in the world of linear media. Services such as Netflix, Disney+ and other streaming platforms have proven that a steady subscription fee combined with an ad‑supported tier can generate substantial revenue.
Should Xbox’s experiment succeed, it would not only preserve its paying subscriber base but also unlock a previously untapped stream of income at a moment when the brand is seeking fresh financial sources. This development matters because console gaming is increasingly positioning itself as a premium offering.
The price tags attached to games, consoles, peripherals and downloadable content are becoming harder for the average consumer to justify, erecting 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. Mobile gaming has already shown that ad‑supported tiers can provide a gateway for users who are unwilling or unable to make large upfront purchases, allowing them to enjoy a game in exchange for watching short commercials. Importantly, participation would be optional.
Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those who are comfortable with occasional ads could access the same content at a reduced price. By offering a two‑tier system, Xbox hopes to keep its loyal fan base satisfied while simultaneously expanding accessibility for newcomers. Although there is no specific survey data on this particular announcement yet, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second advertisement if it granted them an hour of playtime on a beloved or new title.
Xbox likely has internal data that supports this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America demonstrates that in‑game ads consistently outperform television, social media, and other online formats when it comes to ad recall and attribution.
Players are more likely to remember an advertisement they saw while gaming and to correctly associate it with the brand that served it. This is where Xbox’s “around‑the‑game” approach—ads that appear before the gameplay begins rather than embedded within the game world—becomes intriguing. Our data indicate that pre‑game placements achieve higher recall and attribution scores compared with intrinsic in‑game placements.
The distinction matters because, while we may recall an ad seen on TV or scrolling through a feed, that memory does not always translate into a clear brand connection. Gaming appears to occupy a unique position in this regard, which may explain why companies like Xbox and Electronic Arts are increasingly exploring ad‑based revenue models. It is also essential to note that Xbox’s ads are not in‑game; they are pre‑game.
Traditional in‑game formats tend to excel further down the funnel, delivering stronger lifts in brand image, consideration, interest and likeability. A blended strategy that combines both pre‑game and in‑game ads could theoretically offer advertisers the best of both worlds, though it might also provoke greater resistance from players. Xbox has pledged that the advertisements will be non‑intrusive.
By placing ads before the game starts, the company aims to preserve the immersive experience once gameplay begins. This consideration benefits both the player—who avoids interruptions during play—and the advertiser, who wants their message to be part of the experience rather than a disruption. Relevance will be another critical factor. Nobody enjoys seeing an ad for cat food when they do not own a cat, or promotions for games they have already completed.
By ensuring that ads are contextually appropriate and provide a clear rationale for their appearance, Xbox can keep players from abandoning the session while delivering brands an effective platform to reach new audiences. Nonetheless, Xbox is venturing into largely uncharted territory. First, it must gauge how players will react to pre‑game advertising; second, it must determine whether the revenue generated will justify making the model a permanent fixture.
The decision to explore ad‑supported streaming reflects the boldness of Xbox CEO Asha Sharma, who has shown a willingness to experiment with unconventional ideas. Only time will reveal whether this gamble pays off. Historically, many of our gaming‑ad projects have involved "watch an ad, earn an extra life" type arrangements.
Xbox’s proposal asks players to watch an ad in order to access a game they already own, a scenario that our existing data set does not directly address. However, broader research on ad‑format perception—where respondents who recall an ad are asked to describe the format—has consistently highlighted "non‑intrusive" and "immersive" as the most favored descriptors.
If Xbox and future industry players aim to make advertising a lasting component of gaming, these two attributes will be essential metrics to monitor. My forecast is that Xbox will neither be the first nor the last company to test such a 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 other developers to adopt similar strategies, ultimately making video games more affordable and accessible for everyday gamers.