Virginie Chesnais serves as chief marketing officer at the ad‑tech analytics firm Happydemics. For many years, gamers have looked at in‑game advertising with suspicion, and that wariness is understandable. The reputation of ads in interactive entertainment is mixed at best: users often encounter redirects to unrelated sites or apps, deceptive messaging, or close buttons that are difficult to locate, all of which generate frustration. A recent study conducted by eMarketer highlighted the severity of the problem, revealing that 52 % of gamers would abandon a session if they ran into multiple intrusive advertising elements.
Losing half of an audience at the very moment you are trying to engage them is hardly an effective tactic. However, advertising does not have to be synonymous with annoyance. 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 presently piloting a new ad‑supported game‑streaming service and the overall cost of playing games on a steady upward trajectory, there is a genuine opportunity for well‑crafted ads to find a welcoming home inside the gaming ecosystem. The argument for a hybrid "ads‑for‑games" model is more compelling than many anticipate, and it has already been partially validated by the success of linear media platforms.
Services such as Netflix, Disney+, and other on‑demand video providers have demonstrated that a steady revenue stream can be generated by offering both ad‑free subscriptions and lower‑cost, ad‑supported tiers. Should Xbox’s experiment prove viable, the company would not only preserve its paying subscriber base but also unlock an entirely new revenue channel at a moment when additional income is sorely needed. This development matters because console gaming is increasingly positioning itself as a premium offering. The price tags attached to new consoles, full‑price games, accessories, and downloadable content (DLC) are climbing, making it more difficult for the average consumer to justify the expense.
In effect, the cost barrier is limiting the reach of gaming to a narrower, more affluent audience. Xbox itself has noted that, when executed correctly, advertising can lower the cost of entry for gamers. The mobile gaming sector already provides a useful precedent: ad‑supported tiers allow players to experience games without paying large upfront fees, thereby expanding the overall market. Crucially, any ad‑based option would remain optional.
Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads, while those who are willing to tolerate a short commercial break could access the same content for less. By presenting a two‑tier system, Xbox hopes to keep its loyal fanbase satisfied while simultaneously opening the door to newcomers who might otherwise be deterred by price. Although concrete survey data on the latest Xbox announcement is not yet available, it is reasonable to assume that a majority of gamers would accept a 30‑second advertisement if it meant gaining an hour of gameplay on a beloved or new title. Xbox’s internal research is likely to confirm this hypothesis.
Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that in‑game advertising consistently outperforms television, social media, and other digital formats in terms of ad recall and attribution. Players are more likely to remember an ad they saw while playing and to correctly associate it with the sponsoring brand. This is where Xbox’s "around‑the‑game" strategy—placing ads just before the game launches rather than embedding them within the gameplay itself—becomes intriguing.
Our data indicate that these pre‑game placements generate higher recall and attribution scores compared with traditional in‑game placements that appear during play. The distinction matters because while we can often recall ads seen on TV or scrolling through a feed, we do not always link those impressions to a specific brand. Gaming appears to occupy a unique space where ad recall translates more directly into brand association, which likely explains why companies like Xbox and EA are increasingly exploring ad‑based revenue models.
It is essential to note that Xbox’s ads will be pre‑game, not woven into the gameplay. In‑game ad formats tend to excel further down the marketing funnel, delivering stronger lifts in brand image, consideration, interest, and likability. A combined approach—leveraging both pre‑game and in‑game ads—could offer advertisers a balanced mix of benefits, though it might also provoke greater pushback from players who are sensitive to interruptions. Xbox has pledged that the advertisements will be non‑intrusive.
By confining ads to the moments before a game starts, the company aims 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 key.
No gamer wants to see an ad for cat food when they don’t own a cat, or a promotion for a game they have already completed. Contextual, well‑targeted ads that make sense in the moment will help prevent users from abandoning the session at the sight of an irrelevant commercial, while simultaneously giving brands an effective platform to reach fresh audiences. Nevertheless, Xbox is navigating uncharted waters.
The first unknown is how players will react to these pre‑game commercials; the second is whether the ad revenue will be sufficient to justify a long‑term strategy. The decision to explore ad‑supported game streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with new business models. Only time will reveal whether the approach delivers the intended results. Historically, many gaming ad campaigns have relied on the classic "watch an ad, earn an extra life" mechanic.
Xbox, by contrast, is proposing that players watch an ad simply to access a game they already own. Our existing data set does not yet indicate how this model will be received. Related research on ad‑format perception—where respondents who recall an ad are asked to describe the format using positive adjectives—shows that "non‑intrusive" and "immersive" are among the most frequently selected descriptors.
If Xbox and future adopters want to make advertising a sustainable component of gaming, these two qualities will need to be closely monitored. My forecast is that Xbox will neither be the first nor the last platform to test such a model.
Advertising within games has existed for years, but rarely with the player experience at the forefront. Should Xbox succeed, it could pave the way for other gaming companies to adopt similar strategies, ultimately making video games more affordable and accessible for everyday gamers.