Virginie Chesnais serves as the chief marketing officer at Happydemics, an analytics platform focused on advertising technology. For many years, gamers have approached 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 creative, and dismiss buttons that are difficult to locate. These annoyances have cultivated a negative perception of advertising within interactive entertainment.
A recent study conducted by eMarketer underscores this sentiment: 52 % of respondents indicated they would stop playing a title if they were repeatedly exposed to intrusive ad elements. Losing half of an audience at the very moment you are trying to engage them is hardly an effective strategy. However, advertising does not have to be a detriment.
The same research revealed a more optimistic finding—one in five gamers reported they would increase the frequency with which they played a game if the in‑game ads were high‑quality and well‑integrated. In other words, good advertising can actually enhance the gaming experience rather than detract from it. Xbox is currently piloting an ad‑supported game‑streaming service at a time when the overall cost of playing is on an upward trajectory. If the company can deliver ads that meet the standards of quality and relevance that players expect, the model could find a welcoming home in the gaming ecosystem.
The argument for introducing an advertising‑backed tier to a gaming platform is stronger than many critics assume, and it is already validated to some extent by the success of linear media. Services such as Netflix, Disney+, and other video‑on‑demand platforms have demonstrated that offering a lower‑priced, ad‑supported subscription can generate substantial revenue while expanding the audience base.
Should Xbox’s experiment prove viable, it would not only preserve its existing subscriber base but also unlock an entirely new, previously untapped revenue stream—a development the brand could greatly benefit from given its recent financial pressures. This issue is particularly salient because console gaming is increasingly positioned as a premium product. The price tags attached to new consoles, full‑price games, accessories, and downloadable content (DLC) are climbing, making it harder for the average consumer to justify the expense. The cumulative cost creates a barrier that keeps many potential players on the sidelines.
Xbox itself has acknowledged that, when executed correctly, advertising can reduce the cost of entry for gamers. The mobile gaming sector provides a clear precedent: ad‑supported tiers enable players to try a game without paying an upfront fee, often in exchange for watching short video ads.
This model lowers the financial hurdle and can serve as a gateway to deeper engagement with the medium. Importantly, the proposed system would be entirely optional.
Players who prefer an uninterrupted experience could continue to pay for an ad‑free subscription, while those willing to tolerate brief commercials could enjoy a reduced price or even free access. By offering a two‑tier structure, Xbox hopes to retain its loyal fan base while simultaneously opening the door for newcomers who might otherwise be priced out. Although there is no concrete survey data on this specific rollout yet, it is reasonable to speculate that a large majority of gamers would accept a 30‑second advertisement if it meant gaining an hour of gameplay in a beloved or new title.
Xbox’s internal research is likely to confirm this hypothesis. Data from Happydemics, covering 285 in‑game advertising campaigns across the United Kingdom and North America, indicates that in‑game ads consistently outperform traditional TV, social media, and display ads in terms of recall and attribution.
Players are more likely to remember an advertisement they saw while playing and to correctly associate it with the sponsoring brand. Xbox’s “around‑the‑game” approach—showing ads before the game loads rather than embedding them within the gameplay itself—adds another layer of intrigue. Our research shows that pre‑game placements achieve higher recall and attribution scores compared with ads that appear directly inside the game world.
This distinction matters because while users may notice ads on television or social feeds, they do not always link those impressions to the advertised brand. Gaming, by contrast, appears to create a stronger mental connection between the ad and its sponsor, which explains why companies like Xbox and Electronic Arts are exploring ad‑based monetisation models.
It is crucial to note that Xbox’s plan focuses on pre‑game advertising rather than intrusive in‑game pop‑ups. In‑game formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and overall ad likability.
A hybrid model that combines both pre‑game and in‑game ads could theoretically offer advertisers the best of both worlds, but it also risks provoking greater resistance from players who are sensitive to any disruption. Xbox has promised that any advertisements will be non‑intrusive, a claim that is easy to understand. By placing ads before the gameplay begins, the company ensures that the core immersive experience remains untouched.
This is beneficial not only for gamers, who value uninterrupted play, but also for advertisers, who want their messages to be part of a positive experience rather than a nuisance. Relevance will be another key factor. No one wants to see an ad for cat food if they don’t own a cat, or a promotion for a game they have already completed.
By delivering contextual, targeted ads that align with a player’s interests and behavior, Xbox can keep users from abandoning the session while simultaneously providing brands with a high‑impact platform to reach new audiences. Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how the player community will react to a regular stream of pre‑game commercials.
The second unknown is whether the advertising revenue will be sufficient to sustain the model over the long term. The decision to explore ad‑supported streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with new business models. Whether this gamble will pay off remains to be seen. Historically, many of the gaming‑related ad campaigns we have examined relied on a “watch an ad, earn an extra life” mechanic—a clear, immediate reward for the viewer.
Xbox’s proposal is different: it asks players to watch an ad in order to access a game they already own. Our existing data set does not yet reveal how this trade‑off will be perceived.
Nonetheless, research on ad‑format perception shows that when respondents are asked to describe ads they remember, terms such as “non‑intrusive” and “immersive” consistently rank among the most positive descriptors. If Xbox—and potentially other platforms in the future—aim to make advertising a lasting component of the gaming experience, these two attributes will be essential metrics to monitor. In my view, Xbox will neither be the first nor the last company to test this approach.
Advertising has been part of the gaming landscape for years, but it has rarely been designed with the player’s experience as the primary focus. Should Xbox succeed in delivering ads that feel seamless, relevant, and optional, it could pave the way for other publishers and platforms to adopt similar models, ultimately making video games more affordable and accessible for the everyday gamer.