Virginie Chesnais serves as the chief marketing officer at Happydemics, an analytics platform that specializes in advertising technology. For many years, gamers have looked at in‑game advertising with suspicion, and that wariness is not unfounded. 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 advertisement.
A recent study by eMarketer highlighted that 52 % of players would abandon a session if they encountered multiple intrusive ad elements. Losing half of your audience at the very moment you are trying to engage them is hardly a winning formula. 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 ads were of high quality and relevance. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming steadily climbing, well‑crafted advertisements could find a receptive home within the gaming ecosystem. The argument for a hybrid "ads‑for‑games" model is more compelling than many anticipate, and it mirrors a trend already proven in linear media.
Services such as Netflix, Disney+, and other streaming platforms have demonstrated that offering an ad‑supported tier can generate a substantial revenue stream while still providing a free or lower‑cost option for consumers. If Xbox’s experiment proves viable, the company could not only preserve its paying subscriber base but also unlock a previously untapped source of income at a moment when additional cash flow is highly desirable. This development matters because console gaming is increasingly positioning itself as a premium product. The price tags attached to new consoles, games, accessories, and downloadable content have risen to levels that many casual gamers find difficult to justify.
This financial barrier limits the reach of the medium and excludes potential new fans. Xbox itself has suggested that, when executed correctly, advertising could lower the barrier to entry and make gaming more affordable. Mobile gaming already offers a clear precedent: ad‑supported versions allow players to enjoy games without the need for large upfront purchases, expanding the audience base dramatically.
Crucially, the model remains optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads.
By presenting a two‑tier system—ad‑free for subscribers and ad‑supported for free users—Xbox aims to keep its loyal community while simultaneously inviting newcomers who might otherwise be deterred by cost. Although there is no published survey data on this specific Xbox announcement yet, it is reasonable to assume that a large majority of gamers would tolerate a brief 30‑second commercial if it granted them an hour of gameplay in a beloved or new title. Xbox’s internal research likely supports this hypothesis.
Data from Happydemics covering 285 in‑game campaigns across the United Kingdom and North America reveal 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 see while gaming and correctly associate it with the sponsoring brand.
Xbox’s "around‑the‑game" approach—showing ads before the game starts rather than embedding them within the gameplay—adds another layer of advantage. Our research shows that pre‑game placements achieve higher recall and attribution scores compared with ads that appear directly inside the game world.
This distinction is important because, while viewers may notice ads on TV or social feeds, they do not always link those impressions to the brand behind them. Gaming, by contrast, seems to create a stronger mental connection between the ad and the advertiser, which explains why companies like EA and Xbox are increasingly exploring ad‑based revenue models. It is essential to note that Xbox’s ads are not in‑game but pre‑game. Traditional in‑game formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and likeability.
A combined strategy that leverages both pre‑game and in‑game placements could theoretically offer the best of both worlds for advertisers, though it also risks greater pushback from players who are sensitive to any interruption. Xbox has emphasized that the advertisements will be non‑intrusive.
By placing them before the gameplay begins, the company hopes to preserve the immersive experience that gamers value. This approach benefits both the player—who enjoys an uninterrupted session—and the advertiser, who wants the campaign to feel like a natural part of the experience rather than a disruptive interruption. Relevance will be a key factor in the success of this initiative.
No gamer wants to see an ad for cat food when they don’t own a cat, or for a game they have already completed. Contextual, targeted ads that make sense within the player’s interests are more likely to be accepted and less likely to cause users to abandon the session. Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to a model that asks them to watch ads in exchange for access to games they already own.
The second unknown is whether the revenue generated will be sufficient to sustain the model over the long term. The move toward ad‑supported 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 pays off. Historically, many gaming ad campaigns have relied on a "watch an ad, earn an extra life" mechanic. Xbox’s proposal differs: players would watch an ad to unlock a game they already possess.
Our existing data set does not yet indicate how this will be received. However, broader research on ad format perception shows that descriptors such as "non‑intrusive" and "immersive" rank among the most positively received attributes. If Xbox—and potentially other platforms—are to make advertising a lasting component of gaming, they will need to focus closely on these two metrics. My forecast is that Xbox will neither be the first nor the last company to experiment with this model.
Advertising in games has existed for years, but rarely with the player experience as the primary concern. Should Xbox succeed, it could pave the way for other developers and publishers to adopt similar strategies, ultimately making video games more accessible to everyday players while creating new revenue opportunities for the industry.