Virginie Chesnais serves as the chief marketing officer at Happydemics, a platform that specializes in ad‑tech analytics. For many years, gamers have viewed in‑game advertising with suspicion, and their concerns are not unfounded. The reputation of ads within video games is mixed; players often encounter redirects to unrelated websites or apps, misleading content, or dismiss buttons that are difficult to locate, all of which fuel frustration.
A recent study conducted by eMarketer highlighted that 52 percent of gamers would abandon a session if they ran into multiple intrusive advertising elements. Losing half of your audience at the moment you are trying to engage them is hardly an effective approach. Nevertheless, advertising does not have to be a negative experience.
The same research revealed 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, premium‑grade advertisements could find a welcoming environment within the console ecosystem. The argument for incorporating an ad‑for‑games model is more compelling than many anticipate, and it draws support from the success of linear media platforms.
Services such as Netflix, Disney+, and other streaming giants have demonstrated that offering an ad‑supported tier alongside a subscription can generate substantial revenue while preserving a consistent user experience. Should Xbox’s experiment succeed, it would not only keep existing subscribers engaged but also unlock a completely new revenue stream—precisely the kind of financial boost the brand needs right now. This development matters because console gaming is increasingly being positioned 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.
In effect, the cost barrier is limiting the pool of everyday gamers. Xbox itself has stated that, when executed correctly, advertising can lower the cost of entry to gaming.
The mobile‑gaming sector already provides evidence that ad‑supported tiers can serve as a gateway for players who are unwilling or unable to make large upfront purchases. Importantly, participation would remain optional. Players who prefer an ad‑free experience could continue to do so by paying a subscription fee. By presenting a two‑tier system, Xbox aims to preserve its loyal fan base while simultaneously expanding accessibility for newcomers.
Although there is no concrete survey data on the latest Xbox announcement, it is reasonable to assume that most gamers would tolerate a 30‑second commercial if it granted them an hour of gameplay on a favorite or newly released title. Xbox’s internal analytics are likely to confirm this hypothesis. Data from Happydemics covering 285 in‑game campaigns across the United Kingdom and North America indicate that in‑game advertisements consistently outperform television, social media, and other online formats when it comes to recall and attribution.
In other words, players are more likely to remember an ad they saw while playing and correctly associate it with the brand that delivered it. This is where Xbox’s “around‑the‑game” strategy—ads that appear before the gameplay begins rather than embedded within the game world—becomes intriguing.
Our research shows that pre‑game placements generate higher recall and attribution rates compared with intrinsic in‑game placements. The significance of this finding lies in the fact that, while we may remember a commercial seen on TV or a banner while scrolling through a feed, we do not always link that memory to a specific brand. Gaming appears to occupy a unique niche where ad recall and brand association are stronger, which likely explains why companies like Xbox and EA are exploring ad‑based monetisation models.
It is crucial to note that Xbox’s ads are not meant to interrupt the gameplay itself; they will be shown prior to the start of a session. In‑game ad formats, on the other hand, tend to excel further down the conversion funnel, delivering better results for brand‑image uplift, consideration, interest, and overall likability. A hybrid approach that combines both pre‑game and in‑game ads could provide advertisers with a powerful toolkit, but it may also provoke greater resistance from players who value an uninterrupted experience. Xbox has pledged that any advertising will be non‑intrusive.
By placing ads before the game loads, the company aims to preserve the immersive quality of the experience. This consideration benefits both the player—who avoids disruption—and the advertiser, who wants its message to feel like a natural part of the journey rather than a jarring interruption.
Relevance will be key. No gamer wants to see an advertisement for cat food when they do not own a cat, or for a game they have already completed. Contextual, targeted ads that make sense in the moment will help ensure that players do not abandon the session at the first sign of a commercial, while simultaneously giving brands an effective platform to reach fresh audiences. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how the gaming community will react to ads placed around the game, and the second is whether the revenue generated will be sufficient to justify a long‑term commitment to the model. The decision to explore ad‑supported 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 the strategy delivers the intended results. Historically, many of our gaming‑ad projects have relied on a "watch an ad, earn an extra life" premise.
Xbox’s proposal differs: players would watch an ad 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 respondents frequently label non‑intrusive and immersive formats as their top preferences. If Xbox—and potentially other platforms in the future—aim to make gaming ads successful, these two attributes will be essential metrics to monitor. My forecast is that Xbox will neither be the first nor the last to trial such a strategy.
Advertising has been part of gaming for years, but it has rarely been designed with the player’s experience at the forefront. Should Xbox manage to strike the right balance, it could pave the way for similar initiatives across the industry and, more importantly, make video games considerably more accessible to the everyday gamer.