Virginie Chesnais serves as the chief marketing officer at Happydemics, a platform that analyses advertising technology. For many years, gamers have looked at in‑game advertising with suspicion, and their wariness is understandable. The reputation of ads in video games is mixed; players often encounter redirects to external sites, misleading content, or hidden close buttons that are difficult to locate, all of which generate frustration. A recent study by eMarketer revealed that 52 % of gamers would stop playing if they ran into multiple intrusive ad elements.
Losing half of an audience at the moment you’re trying to engage them is hardly a winning tactic. Nevertheless, advertisements do not have to be a negative experience.
The same research indicated that one in five gamers would actually increase the frequency with which they play a title if the in‑game ads were of high quality and relevance. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming continuing to climb, well‑crafted ads could find a receptive home in the console ecosystem. The argument for a modest ad‑for‑games model is more compelling than many anticipate, and it has already been validated to some extent by linear media. Services such as Netflix, Disney+, and other streaming platforms have demonstrated that offering an ad‑supported tier alongside a premium subscription can generate substantial revenue while keeping a broad audience engaged.
Should Xbox’s experiment succeed, it would not only preserve its existing subscriber base but also unlock a fresh, previously untapped stream of income at a moment when the brand is seeking additional financial momentum. This development matters because console gaming is increasingly positioning itself as a premium offering.
Prices for games, consoles, accessories, and downloadable content have risen steadily, making it harder for the average consumer to justify the expense and creating a barrier for casual or budget‑conscious players. Xbox itself has stated that, when executed correctly, advertising can lower the cost of entry to gaming. Mobile gaming already provides a clear precedent: ad‑supported tiers allow players to experience games without paying large upfront fees, opening the market to a wider audience. Importantly, the model remains optional.
Players who prefer an ad‑free experience can continue to enjoy it by paying the subscription fee. By offering a two‑tier system, Xbox hopes to retain its loyal fan base while simultaneously making games more accessible to newcomers who might otherwise be priced out. Although no specific survey data on Xbox’s new approach has been released yet, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second advertisement if it meant gaining an hour of gameplay on a favorite or brand‑new title. Xbox’s own analytics are likely to confirm this hypothesis.
Happydemics data from 285 in‑game campaigns across the United Kingdom and North America show that in‑game advertisements consistently out‑perform television, social‑media, and other online formats when it comes to 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—ads that appear before the game launches rather than embedded within the gameplay—becomes intriguing.
Our research indicates that these pre‑game placements deliver a clear advantage in terms of ad recall and proper brand attribution compared with traditional in‑game placements. 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 the correct brand. Gaming appears to operate 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 gaming models.
It is essential to note that Xbox’s ads will be pre‑game, not intrusive during the actual play session. 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 ads could offer advertisers the best of both worlds, though it may also provoke greater resistance from players who value uninterrupted immersion. Xbox has pledged that the advertisements will not be disruptive.
By placing ads before the gameplay begins, the company aims to preserve the immersive experience that gamers cherish. This approach benefits not only the players but also advertisers, who want their messages to complement rather than interrupt the gaming journey. Relevance will be key.
No one wants to see a commercial for cat food when they don’t own a cat, or an ad for a game they have already completed. By delivering contextual, purposeful ads, Xbox can keep players from abandoning the experience while providing brands with a premium platform to reach new 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 decision to explore ad‑supported game streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has shown a willingness to experiment with new business models. Only time will reveal whether this strategy delivers the intended results.
Historically, many gaming ad campaigns have followed a “watch an ad, earn an extra life” formula. Xbox’s proposal differs: 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, broader research on ad‑format perception shows that when participants are asked to describe the format they remember, terms like “non‑intrusive” and “immersive” rank among the most positive descriptors. If Xbox—and potentially other platforms in the future—are to make gaming ads work, these two qualities will be crucial metrics to monitor.
My forecast is that Xbox will neither be the first nor the last company to trial such a strategy. Advertising in video games has existed for years, but it has rarely been designed with the player’s experience at the forefront. Should Xbox succeed, it could pave the way for similar initiatives across the industry and, more importantly, make video games far more affordable and reachable for everyday gamers.