Virginie Chesnais serves as the chief marketing officer for Happydemics, an ad‑tech analytics service. For many years, gamers have been skeptical about advertising that appears inside games, and that distrust is understandable.
In‑game ads have earned a mixed reputation, often because they redirect users to unrelated websites or apps, present misleading content, or hide the close button so badly that players struggle to dismiss them. A recent study by eMarketer highlighted that 52 % of gamers would stop playing if they encountered several intrusive ad elements. Losing half of an audience at the very moment you try to engage them is hardly a winning tactic.
However, ads do not have to be a nuisance. The same research indicated that one in five players would actually increase the frequency with which they play a title if the in‑game advertisements were of high quality and relevance.
With Xbox currently piloting an ad‑supported game‑streaming service amid a backdrop of steadily climbing costs for playing, well‑crafted ads could find a receptive home in the gaming ecosystem. The argument for introducing a modest advertising component to games is stronger than many anticipate, and it is already partially validated by the success of linear media models. 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 retaining subscribers. Should Xbox’s experiment succeed, it would not only preserve its paying user base but also unlock a fresh, previously untapped revenue stream—something the brand could certainly use at this juncture.
The relevance of this shift lies in the fact that console gaming is increasingly becoming a premium experience. Prices for games, consoles, accessories, and downloadable content are rising to levels that many casual players find difficult to justify, creating a barrier to entry for the average enthusiast. Xbox itself has stated that, when executed correctly, advertising can help lower the cost of accessing games. Mobile gaming already offers a precedent: ad‑supported tiers allow players to engage without the need for large upfront purchases, expanding the market to those who might otherwise be excluded.
Crucially, the model remains optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads, while those willing to tolerate a brief commercial can enjoy the same content at a reduced price. By providing a dual‑tier system, Xbox hopes to keep its loyal fanbase satisfied while simultaneously opening the door for newcomers who might be deterred by high price points. Although there is currently no public survey data specific to Xbox’s new approach, it is reasonable to assume that a large majority of gamers would accept a 30‑second advertisement if it granted them an hour of playtime on a favorite or newly released title.
Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America reveals that in‑game ads consistently outshine TV, social, and online placements in terms of recall and attribution. Players are more likely to remember an ad they saw while gaming and to correctly associate it with the sponsoring brand.
Xbox’s “around‑the‑game” strategy—showing ads before the game begins rather than embedding them within the gameplay—adds another layer of intrigue. Our data indicate that pre‑game formats deliver a clear advantage in ad recall and attribution compared with ads that appear directly inside the game world. This distinction matters because, while we may recall a commercial seen on television or while scrolling through a feed, we do not always link that memory to the brand behind it.
Gaming appears to operate in its own league regarding this metric, which likely explains why companies like Xbox and EA are increasingly exploring ad‑based models. It is important to note that Xbox’s advertisements will be pre‑game, not in‑game.
In‑game ad formats tend to perform better further down the marketing funnel, boosting brand‑image uplift, consideration, interest, and likeability. A hybrid approach that combines both pre‑game and in‑game placements could theoretically offer advertisers the best of both worlds, yet it also risks provoking greater pushback from players who are sensitive to interruptions.
Xbox has pledged that the ads will be non‑intrusive. By positioning commercials before the gameplay starts, the company aims to preserve the immersive experience that gamers value.
This approach benefits both players—who avoid disruption during play—and advertisers, who want their messages to integrate smoothly rather than feel like an unwanted interruption. 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, targeted ads that make sense for the individual player, Xbox can minimize the chance that users abandon the experience at the sight of a commercial, while providing brands with a highly effective platform to reach new audiences.
Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will truly react to this model; the second is whether the ad revenue will be sufficient to justify a long‑term commitment. The move toward ad‑supported game streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who appears willing to experiment with new revenue mechanisms.
Only time will reveal whether the strategy delivers the intended results. Historically, many gaming ad campaigns have relied on the classic "watch an ad, earn an extra life" mechanic. Xbox’s proposal differs: it asks players to view an ad to gain access to a game they already own. 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 in the future—aim to make gaming ads successful, these two qualities will be essential to monitor. My forecast is that Xbox will not be the first nor the last to experiment with this kind of model.
Advertising within games has existed for years, but rarely with the player’s experience as the central focus. 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.