Virginie Chesnais serves as chief marketing officer at the ad‑technology analytics firm Happydemics. For many years, gamers have viewed in‑game advertising with suspicion, and that wariness is not unfounded. The reputation of ads in video games is mixed; players often encounter redirects to unrelated sites or apps, misleading content, or obscure close buttons that make it difficult to dismiss the interruption. A recent study from eMarketers highlighted that 52 % of gamers would abandon a session if they ran into several disruptive advertising elements.
Losing half of your audience at the very moment you are trying to engage them is hardly a winning tactic. Nevertheless, advertising does not have to be a negative experience. The same research indicated that one in five gamers would actually increase the frequency with which they played a title if the in‑game ads were of high quality and relevance.
This insight arrives at a time when Xbox is piloting a new ad‑supported game‑streaming service, and the overall cost of gaming continues to climb. High‑caliber ads could therefore find a receptive home within the gaming ecosystem. The argument for incorporating a modest advertising component into games is stronger than many anticipate, and it is already validated to some extent by the broader media landscape. Platforms such as Netflix, Disney+, and other streaming services have demonstrated that offering an ad‑supported tier can generate substantial revenue while still delivering a reliable service.
Should Xbox’s experiment succeed, it would not only preserve its paying subscriber base but also unlock an entirely new revenue stream—an especially valuable prospect as the brand seeks fresh sources of income. This development matters because console gaming is increasingly positioned as a premium offering. The price tags attached to new consoles, full‑price games, accessories, and downloadable content are becoming harder for the average consumer to justify, erecting a barrier that keeps many potential players at bay. Xbox itself has stated that, when executed correctly, advertising can lower the financial barrier to entry, allowing more people to experience games without the need for large upfront purchases.
Mobile gaming has already shown that ad‑supported tiers can act as a gateway, enabling users to try a game without paying the full price. Crucially, any advertising model Xbox adopts would be optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those willing to watch ads could access the same content for free or at a reduced cost.
By offering a two‑tier system, Xbox aims to keep its loyal fan base satisfied while simultaneously attracting newcomers who might otherwise be deterred by cost. Although we lack specific survey data on the latest Xbox announcement, it is reasonable to assume that a large majority of gamers would tolerate a brief 30‑second advertisement if it meant earning an hour of gameplay on a favorite or new title.
Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America reveals that in‑game ads consistently outperform television, social media, and other online formats in terms of recall and attribution. In other words, players are more likely to remember an ad they saw while gaming and correctly associate it with the brand that served it. Xbox’s “around‑the‑game” approach—showing ads before the game loads rather than embedding them within the gameplay—adds another layer of intrigue.
Our data indicate that pre‑game placements have a distinct advantage in ad recall and attribution when compared with ads that appear directly inside the game world. This distinction matters because, while we can often recall ads seen on TV or scrolling through feeds, we do not always link those impressions to the correct brand. Gaming appears to be in a league of its own for this metric, which likely explains why companies such as Xbox and Electronic Arts are increasingly exploring ad‑based models. It is important to note that Xbox’s ads would not be intrusive in‑game; they would appear before the session begins, preserving the immersive experience that gamers cherish.
This separation benefits both players and advertisers: gamers enjoy an uninterrupted play session, while advertisers get a captive audience that is primed for brand exposure. Relevance will be key. No player wants to see an advertisement for cat food when they don’t own a cat, or a promotion for a game they have already completed.
By delivering context‑aware ads that align with the player’s interests and the game’s theme, Xbox can minimize the risk of users abandoning the experience at the sight of an irrelevant commercial, while simultaneously providing brands with a high‑impact platform to reach new consumers. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how the gaming community 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 decision to explore 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 this gamble pays off.
Historically, many gaming ad campaigns have relied on a “watch an ad, earn an extra life” mechanic. Xbox’s proposal is different: players would watch an ad to gain access to a game they already own, rather than receiving a direct in‑game reward.
Our existing data set does not yet show how this model will be received. Related research on ad format perception shows that when respondents are asked to describe ads they remember, terms like “non‑intrusive” and “immersive” rank among the most positive descriptors.
If Xbox and future adopters of similar models want to succeed, they will need to focus on delivering ads that feel seamless and enhance, rather than disrupt, the gaming experience. In my view, Xbox will not be the first nor the last platform to trial this approach. Advertising has been part of gaming for years, but often without the player’s experience as the primary consideration. Should Xbox manage to strike the right balance, it could pave the way for other companies to follow suit, ultimately making video games more affordable and accessible for everyday gamers.