Virginie Chesnais serves as chief marketing officer at Happydemics, a platform that analyses advertising technology performance. For many years, gamers have viewed in‑game advertising with suspicion, and the wariness is understandable.
The reputation of ads in interactive entertainment is mixed, often marred by redirects to unrelated sites, misleading content, or hide‑away close buttons that frustrate users. A recent study from eMarketer highlighted that 52 % of players would abandon a title if they encountered several intrusive ad elements. Losing half of an audience at the moment you are trying to engage them is hardly a winning tactic.
However, advertisements do not have to be synonymous with annoyance. The same research revealed that one in five gamers would actually increase the frequency with which they play a game if the ads presented were of high quality and relevance.
With Xbox currently piloting an ad‑supported game‑streaming service amid a steady climb in the price of gaming experiences, there is a genuine opportunity for well‑crafted ads to find a welcoming home within the console ecosystem. The argument for a modest ad‑for‑games model is more compelling than many might assume, especially when we look at the success of linear media platforms. Services such as Netflix, Disney+, and other streaming giants have demonstrated that offering both ad‑free and ad‑supported tiers can generate substantial revenue while keeping a broad audience satisfied.
Should Xbox’s experiment prove viable, it could preserve its subscription base and simultaneously unlock an entirely new 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. The cost of new releases, hardware, accessories, and downloadable content continues to climb, creating a financial hurdle for the average player. Xbox itself has acknowledged that, when executed correctly, advertising can lower the cost of entry to gaming.
Mobile gaming already provides a precedent: ad‑supported tiers allow players to engage without paying large upfront fees, opening the market to a wider demographic. Crucially, any advertising model Xbox introduces would be optional.
Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those willing to watch ads could enjoy the same content at a reduced price. By offering a two‑tier system, Xbox aims to keep its loyal fan base intact while extending accessibility to newcomers.
Although specific survey data on this particular rollout is not yet available, it is reasonable to assume that the majority of gamers would tolerate a brief 30‑second commercial if it granted them an hour of gameplay on a beloved or new title. Xbox likely has internal data supporting this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America indicates that advertisements embedded within games consistently outperform TV, social, and standard online placements in terms of recall and attribution.
In other words, gamers are more likely to remember an ad they see while playing and to correctly associate it with the sponsoring brand. Xbox’s “around‑the‑game” strategy—showcasing ads before the gameplay begins rather than during the session—adds another layer to this picture. Our data show that pre‑game formats achieve higher recall and attribution scores compared with ads that appear directly inside the game world.
This distinction matters because, while we may notice ads on television or scrolling feeds, we do not always link those impressions to the brands behind them. Gaming appears to occupy a unique space where ad memory and brand linkage are especially strong, which may explain why companies like Xbox and EA are exploring ad‑based models more aggressively.
It is important to note that Xbox’s ads are not intended to interrupt the core experience; they will be displayed before the game starts. In‑game ad formats tend to excel further down the marketing funnel, delivering stronger lifts in brand image, consideration, interest, and likeability. A hybrid approach that combines both pre‑game and in‑game placements could theoretically provide advertisers with the best of both worlds, though it also risks provoking greater pushback from players if not handled delicately. Xbox has pledged that the advertisements will be non‑intrusive.
By placing them before the session, the company aims to preserve immersion and avoid breaking the player’s focus. This is beneficial not only for gamers but also for advertisers, who want their messages to feel like a natural part of the experience rather than an unwanted interruption. Relevance will be key.
No one wants to see a promotion for cat food when they don’t own a cat, or an ad for a game they have already completed. Contextual, targeted ads that make sense in the moment will help keep players from abandoning the session at the sight of an irrelevant commercial, while simultaneously giving brands a high‑impact platform to reach fresh audiences. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how players will react to the presence of ads at all; the second is whether the revenue generated will be sufficient to justify a long‑term commitment to the model. 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.
Only time will reveal whether the approach pays off. Historically, many gaming ad programs have relied on “watch an ad, earn an extra life” mechanics. Xbox’s proposal is different: it asks players to watch an ad simply to access a game they already own. Our existing data set does not yet tell us how this will be received.
However, broader research on ad format perception shows that descriptors such as “non‑intrusive” and “immersive” are among the most positively viewed by consumers. If Xbox—and potentially other platforms—can deliver ads that meet these criteria, they stand a strong chance of success.
My forecast is that Xbox will not be the first nor the last to experiment with this strategy. Advertising has been part of gaming for many years, but it has rarely been designed with the player’s experience at its core. 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 affordable and accessible for everyday gamers.