Virginie Chesnais serves as Chief Marketing Officer at the ad‑tech analytics firm Happydemics. For years, many gamers have viewed in‑game advertising with suspicion, and the concerns are understandable. The reputation of ads in video games is mixed at best, often plagued by irritating redirects to external sites, misleading content, or obscure, hard‑to‑find close buttons that frustrate users.
A recent study by eMarketers highlighted that 52 % of players would abandon a game if they encountered several disruptive advertising elements. Losing half of your audience at the moment you’re trying to engage them is hardly a winning strategy. Nevertheless, advertisements do not have to be a negative experience. The same research indicated that one out of five gamers would actually play a title more often if the in‑game ads were of high quality and well‑integrated.
With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming steadily climbing, premium‑grade ads could find a receptive home within the gaming ecosystem. The argument for introducing a modest advertising model to games is more compelling than many assume, and it has already been demonstrated in linear media.
Platforms such as Netflix, Disney+, and other streaming services have proven that offering an ad‑supported tier can generate substantial revenue while still delivering a reliable service. Should Xbox’s experiment prove successful, it would not only preserve its existing subscriber base but also unlock a brand‑new, previously untapped income stream—something the company could certainly use at this stage. This development matters because console gaming is increasingly being positioned as a premium offering. Prices for games, consoles, accessories, and downloadable content keep rising, making it harder for the average consumer to justify the expense and creating a barrier for everyday players.
Xbox itself has stated that, when executed correctly, advertising can lower the cost of entry to gaming. The mobile‑gaming sector has already shown that ad‑supported tiers can provide a gateway for players who might otherwise be deterred by high upfront costs. Importantly, the model remains optional. Players who prefer an ad‑free experience can continue to enjoy it by paying a subscription fee.
By providing a two‑tier system, Xbox hopes to keep its loyal fan base while simultaneously making games more attainable for newcomers. Although no concrete survey data on this specific announcement exists yet, it seems reasonable to assume that the majority of gamers would tolerate a 30‑second commercial if it meant they could play a beloved title or a brand‑new game for an hour.
Xbox’s internal research will almost certainly confirm this intuition. Happydemics data from 285 in‑game campaigns across the United Kingdom and North America reveal that in‑game advertisements consistently outperform TV, social, and standard online ads when it comes to recall and attribution.
Players are far more likely to remember an ad they saw while gaming and to correctly associate it with the sponsoring brand. This is where Xbox’s “around‑the‑game” approach—ads displayed before the game launches rather than embedded within the gameplay—becomes intriguing. Our data show that pre‑game formats enjoy a clear advantage in both recall and attribution compared with intrinsic in‑game placements. The distinction matters because, while we may remember a commercial that appears on television or a banner that scrolls through a social feed, that memory does not always translate into a strong brand link.
Gaming appears to occupy a unique position in this regard, which likely explains why companies like Xbox and EA are increasingly exploring ad‑based gaming models. It is also crucial to note that Xbox’s ads are not in‑game; they are pre‑game. Traditional in‑game ad formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and overall likability. A hybrid strategy that combines both pre‑game and in‑game ads could offer advertisers the best of both worlds, though it might also provoke additional pushback from players.
Xbox has pledged that the ads will be non‑intrusive, a promise that is easy to understand. By placing ads before the gameplay begins, the company ensures that the immersive experience remains uninterrupted. This is a key consideration not only for gamers but also for advertisers, who want their messages to complement rather than disrupt the experience. Relevance will be another critical factor.
Nobody 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 contextual, purpose‑driven ads, Xbox can keep players from abandoning the session while providing brands with a highly effective 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, and 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 has demonstrated a willingness to experiment with new business models. Only time will reveal whether this gamble pays off. Historically, many gaming‑related ad campaigns have followed a “watch an ad, earn an extra life” formula.
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 indicate how this will be received.
However, 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 top positive descriptors. If Xbox and future adopters want to make advertising a lasting part of gaming, these two metrics will need close monitoring.
My forecast is that Xbox will neither be the first nor the last platform to test such a strategy. Advertising has been part of gaming for a long time, but it has rarely been designed with the player’s experience at the forefront. Should Xbox succeed, it could open the door for other game companies to follow suit, ultimately making video games more accessible to the everyday gamer.