Virginie Chesnais serves as chief marketing officer at Happydemics, an analytics platform that focuses on advertising technology. For many years, gamers have viewed in‑game advertising with suspicion, and that wariness is understandable. The reputation of ads in video games is mixed at best, with frequent complaints about redirects to unrelated sites, misleading content, or the absence of an obvious way to close the ad. A recent study by eMarketers highlighted that 52 % of players would abandon a session if they encountered several disruptive ad elements, indicating that losing half of an audience at the moment you are trying to engage them is far from an effective approach.
Nevertheless, advertising does 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 a high quality. This suggests that, when executed well, ads can become a value‑adding component rather than a nuisance. Xbox is currently experimenting with an ad‑supported game‑streaming service at a time when the overall cost of gaming—games themselves, consoles, accessories, and downloadable content—is climbing steadily.
In such an environment, well‑crafted advertisements could find a receptive home. The argument for incorporating an ads‑for‑games model is more compelling than many anticipate, especially when we look at the success of linear media platforms.
Services like Netflix, Disney+, and other streaming giants have demonstrated that offering an ad‑supported tier can generate substantial revenue while still delivering a reliable product. If Xbox’s trial proves profitable, the company could not only keep its paying subscribers happy but also unlock a completely new revenue stream—something the brand could greatly benefit from given the current financial pressures.
Console gaming is increasingly positioning itself as a premium service. Prices for hardware, software, and add‑ons have risen to the point where many casual players find it difficult to justify the expense, creating a barrier to entry. Xbox itself has stated that, when handled correctly, advertising can lower the cost of accessing games. 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.
By offering an optional ad‑supported path, Xbox hopes to keep its core fan base while simultaneously inviting newcomers who might otherwise be priced out. 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 short 30‑second commercial if it meant they could play a favorite or brand‑new title for an hour without paying. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America indicates that in‑game ads consistently outshine TV, social, and other online formats when it comes to recall and accurate brand attribution. In other words, players are more likely to remember an ad they saw while gaming and correctly associate it with the sponsoring brand.
Xbox’s “around‑the‑game” strategy—placing ads before the gameplay begins rather than embedding them within the game world—adds another layer of intrigue. Our data show that pre‑game placements generate higher recall and attribution scores compared with ads that appear inside the game environment. This distinction matters because, while we can often recollect ads seen on television or scrolling through social feeds, we do not always link those impressions to the correct brand.
Gaming, however, appears to operate in a different league for this metric, which explains why companies like Xbox and EA are exploring ad‑based models more aggressively. It is crucial to note that Xbox’s ads will be pre‑game, not in‑game.
Traditional in‑game formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and likeability. A hybrid approach—combining pre‑game and in‑game ads—could theoretically give advertisers the best of both worlds, though it might also provoke greater pushback from players who are sensitive to any interruption. Xbox has pledged that the advertisements will be non‑intrusive.
By delivering ads before the actual gameplay starts, the company aims to preserve the immersive experience that gamers value. This approach benefits both the player, who can enjoy uninterrupted sessions, and the advertiser, who wants their message to be part of the experience rather than a disruptive interruption.
Relevance will be key. No one wants to see an ad for cat food when they don’t own a cat, or for a game they have already completed.
Contextual, well‑targeted ads will help ensure that players do not abandon the session the moment an ad appears, while simultaneously 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 a pre‑game ad model, and the second is whether the revenue generated will be sufficient to sustain the approach over the long term. The move toward ad‑supported streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who appears willing to experiment with new monetisation strategies. Time will reveal whether this gamble pays off.
Historically, many gaming ad campaigns have followed a "watch an ad, earn an extra life" model. Xbox’s proposition differs: it asks players to watch an ad to access a game they already own. Our existing data set does not yet show how this will be received.
However, 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—aim to make gaming ads successful, these two attributes will be essential metrics to monitor.
In my view, Xbox will not be the first nor the last to trial this type of 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 pave the way for similar initiatives across the industry, ultimately making video games more affordable and accessible for everyday gamers.