Virginie Chesnais serves as the chief marketing officer at Happydemics, a platform that specializes in ad‑tech analytics. For many years, gamers have looked at in‑game advertising with suspicion, and that wariness is understandable.
The reputation of ads in video games is mixed at best: players often encounter redirects to unrelated websites or apps, misleading content, or dismissive close buttons that are difficult to locate. These frustrations have contributed to a negative perception of advertising within interactive entertainment. A recent study conducted by eMarketer highlighted that 52 % of gamers would abandon a session if they were bombarded with multiple intrusive ad elements. Losing half of your audience at the very moment you are trying to engage them is hardly a winning formula.
However, advertisements do not have to be a nuisance. The same research revealed that one in five gamers would actually increase the frequency with which they played a title if the in‑game ads were high‑quality and unobtrusive.
This suggests that, when executed correctly, advertising can enhance rather than detract from the gaming experience. Xbox is currently piloting an ad‑supported game‑streaming service, and the overall cost of playing video games continues to climb.
In this context, well‑crafted advertisements could find a welcoming home within the gaming ecosystem. The argument for introducing an ad‑based model to games is more compelling than it might first appear, especially when we look at the success of linear media platforms. Services such as Netflix, Disney+, and other streaming giants have demonstrated that a dual‑tier approach—offering both ad‑free subscriptions and lower‑cost, ad‑supported options—can generate substantial revenue while expanding the audience. If Xbox’s experiment proves viable, it could not only preserve its existing subscriber base but also unlock a fresh, previously untapped revenue stream at a moment when the brand is eager for additional income.
This development matters because console gaming is increasingly positioning itself as a premium product. Prices for games, consoles, accessories, and downloadable content are soaring, creating a financial barrier for the average consumer.
As Xbox itself noted in its announcement, thoughtful advertising can help lower the cost of access to games. The mobile‑gaming sector has already shown that ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases.
Crucially, any advertising model 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 enjoy a reduced price. By offering a two‑tier system, Xbox hopes to keep its loyal fan base satisfied while simultaneously making games more approachable for newcomers.
Although there is no concrete survey data on the latest Xbox announcement, it is reasonable to assume that most gamers would tolerate a 30‑second commercial if it granted them an hour of playtime on a beloved or new title. Xbox likely has internal data that supports this hypothesis. Happydemics analyzed 285 in‑game campaigns across the United Kingdom and North America and found that in‑game advertisements consistently outperformed TV, social, and online ads in terms of recall and attribution.
In other words, gamers are more likely to remember an ad they saw while playing and correctly associate it with the brand that displayed it. Xbox’s “around‑the‑game” strategy—showing ads before the gameplay begins rather than embedding them within the game world—adds another layer to this insight. Our data indicate that pre‑game placements generate higher ad recall and attribution compared with intrinsic in‑game spots.
This is significant because, while we may recall a commercial seen on television or scrolling through a social feed, we do not always link it to the sponsoring brand. Gaming appears to be a unique environment where recall and brand association are stronger, which likely explains why companies like Xbox and EA are exploring ad‑based models. It is essential to note that Xbox’s ads would not be woven into the game itself; they would appear prior to the start of a session.
Traditional in‑game formats tend to excel further down the conversion funnel, delivering better results for brand‑image uplift, consideration, interest, and likability. A hybrid approach—combining pre‑game and in‑game ads—could provide advertisers with a comprehensive toolkit, though it might also provoke greater resistance from players.
Xbox has pledged that any advertisements will be non‑intrusive. By placing ads before the actual gameplay, the company aims to preserve the immersive experience that gamers value.
This consideration benefits both the player, who avoids interruptions during play, and the advertiser, who wants their message to feel like a natural part of the experience rather than a disruptive interruption. Relevance will be another key factor. No gamer wants to see an ad for cat food when they do not own a cat, or a promotion for a game they have already completed.
By delivering context‑aware, personalized ads, Xbox can keep players engaged rather than prompting them to abandon the session, while simultaneously offering brands a high‑impact platform to reach new audiences. Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to pre‑game advertising; the second is whether the revenue generated will be sufficient to sustain the model over the long term. 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 business models.
Time will reveal whether this strategy delivers the intended outcomes. Historically, many gaming ad campaigns have been built around “watch an ad, earn an extra life” mechanics.
Xbox’s proposition differs: it asks players to watch an ad to access a game they already own. Our current data set does not yet show how this will be received. 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 positive descriptors. If Xbox and future adopters aim to make gaming ads successful, these two metrics will be critical to monitor.
In my view, Xbox will neither be the first nor the last platform to trial such a strategy. Advertising in 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 other gaming companies to follow, ultimately making video games more affordable and accessible for everyday players.