Virginie Chesnais serves as chief marketing officer at Happydemics, an analytics platform that focuses on advertising technology. For years, many gamers have been skeptical about the presence of advertisements within games, and their concerns are understandable. In‑game ads have earned a mixed reputation, often because they redirect users to unrelated websites or apps, present misleading content, or feature hard‑to‑find close buttons that frustrate players.
A recent study conducted by eMarketer highlighted that 52 % of gamers would abandon a session if they encountered several disruptive ad elements. Losing half of an audience at the moment you are trying to engage them is hardly an effective approach. Nevertheless, advertisements do 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 in‑game ads were high‑quality and well‑executed. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming steadily climbing, premium‑grade ads could find a welcoming environment in the console space. The argument for a modest "ads‑for‑games" model is more compelling than many anticipate, especially when we look at the success of linear media.
Services such as Netflix, Disney+, and other streaming platforms have demonstrated that offering an ad‑supported tier can generate significant revenue while still delivering a consistent product. Should Xbox’s experiment prove fruitful, it would not only preserve its paying subscriber base but also unlock an entirely new, previously untapped revenue stream—a development the brand could greatly benefit from at this juncture.
This issue matters because console gaming is increasingly positioned as a premium offering. Prices for games, consoles, accessories, and downloadable content continue to rise, making it harder for the average consumer to justify the expense and creating a barrier to entry for casual players.
Xbox itself has stated that, when executed correctly, advertising can lower the cost of accessing games. Mobile gaming already provides evidence that ad‑supported tiers can give players a pathway into the ecosystem without demanding a large upfront payment. Importantly, the model would be entirely 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 reduced price point. By offering a two‑tier system, Xbox hopes to keep its loyal fan base intact while simultaneously making games more attainable 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 meant gaining an hour of playtime on a favorite or brand‑new title. Xbox’s internal data likely supports this hypothesis.
Happydemics has analyzed 285 in‑game campaigns across the United Kingdom and North America, finding that in‑game advertisements consistently outperform TV, social, and other online formats when it comes to recall and attribution. Players are more likely to remember an ad they saw while gaming and correctly associate it with the brand that displayed it. This is where Xbox’s “around‑the‑game” strategy—ads shown before the game begins rather than embedded within the gameplay—becomes intriguing.
Our research indicates that these pre‑game placements achieve higher recall and attribution scores compared with ads that appear directly inside the game world. The distinction matters because, while we can often recall ads encountered on television or social feeds, those memories do not always translate into a clear brand connection.
Gaming appears to occupy a unique space where recall more readily leads to brand association, which likely explains why companies such as Xbox and EA are increasingly exploring ad‑based models. It is crucial to note that Xbox’s ads are intended to be pre‑game rather than in‑game.
Traditional in‑game formats tend to excel further down the funnel, delivering stronger lifts in brand image, consideration, interest, and likability. A hybrid approach that combines both pre‑game and in‑game ads could offer advertisers the best of both worlds, though it also raises the risk of greater pushback from players.
Xbox has pledged that any ads will be non‑intrusive. By placing commercials before the gameplay starts, the immersive experience remains untouched, which benefits both the gamer—who can dive straight into the action—and the advertiser, who wants their message to be part of the experience rather than a disruption. Relevance will also be key.
No player enjoys seeing an ad for cat food when they don’t own a cat, or a promotion for a game they have already completed. Contextual, targeted ads that make sense in the moment will help prevent users from abandoning the session and will give brands a more effective platform to reach new audiences.
Nonetheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to the presence of ads, and the second is whether the revenue generated will be sufficient to sustain the model over the long term. The decision to explore ad‑supported game streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has shown a willingness to experiment with new business models.
Only time will reveal whether this strategy pays off. Historically, many gaming ad initiatives have followed a "watch an ad, earn an extra life" structure. Xbox’s proposal differs: it asks players to view an ad to unlock access to a game they already own. Our existing data set does not yet indicate how this will be received.
However, research on ad‑format perception—where participants recall an ad and then select positive descriptors—has consistently highlighted "non‑intrusive" and "immersive" as the most favored attributes. If Xbox, and potentially other platforms in the future, aim to make gaming ads successful, these two metrics will be essential to monitor. My forecast is that Xbox will not be the first nor the last to trial such a model.
Advertising in games has existed for a long time, 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 and, more importantly, make video games considerably more accessible to everyday gamers.