Virginie Chesnais serves as Chief Marketing Officer at Happydemics, a platform that specializes in ad‑tech analytics. 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 at best; players often encounter redirects to unrelated websites or apps, deceptive or irrelevant content, and close‑button designs that are hard to locate. Such experiences can be frustrating and break immersion.
A recent study conducted by eMarketer highlighted the severity of the issue: 52 percent of respondents said they would stop playing a title if they ran into multiple disruptive advertising elements. Losing half of an audience at the moment you’re trying to engage them is hardly an effective strategy. However, the same research also revealed a more optimistic side—one in five gamers indicated they would actually play a game more often if the in‑game ads were of high quality and well integrated.
This insight arrives at a time when Xbox is piloting an ad‑supported game‑streaming service, and the overall cost of gaming continues to climb. If the advertisements are crafted with care, they could find a welcoming niche within the gaming ecosystem.
The argument for introducing an "ads‑for‑games" model is stronger than many realize, and it is already supported by evidence from linear media. Services such as Netflix, Disney+, and other video‑streaming platforms have demonstrated that offering a lower‑priced, ad‑supported tier can generate substantial revenue while still delivering a consistent user experience.
Should Xbox’s experiment succeed, it would not only preserve its existing subscription base but also unlock a previously untapped income stream—something the brand could certainly use given its recent financial pressures. Console gaming is increasingly positioning itself as a premium offering. Prices for games, consoles, accessories, and downloadable content (DLC) keep rising, making it harder for the average consumer to justify the expense.
This creates a barrier that excludes many potential players. Xbox itself has acknowledged that, when executed correctly, advertising can help lower the cost of access to games. Mobile gaming already provides a clear example: ad‑supported tiers let players dip their toes into a title without paying a large upfront fee, often in exchange for watching short video ads. Importantly, any advertising model Xbox adopts would be optional.
Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads, while those who are price‑sensitive could choose the ad‑supported path. By offering a two‑tier system, Xbox hopes to keep its loyal fan base happy while simultaneously expanding its reach to newcomers who might otherwise be priced out. Although we do not yet have survey data specific to Xbox’s new approach, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second commercial if it granted them an hour of gameplay in a beloved or brand‑new title. Happydemics data from 285 in‑game campaigns across the United Kingdom and North America show that in‑game ads consistently outperform traditional TV, social, and online placements 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 sponsoring brand. Xbox’s “around‑the‑game” strategy—showing ads before the game launches rather than embedding them within the gameplay—adds another layer of appeal.
Our research indicates that pre‑game placements achieve higher ad recall and attribution compared with ads that appear directly inside the game world. This distinction matters because while we can often recall a television or social‑media ad, we may not always link it to the brand that aired it. Gaming, by contrast, appears to be a unique environment where ad recall translates more directly into brand recognition, which likely explains why companies like EA and Xbox are increasingly exploring ad‑based revenue models. It is crucial to note that Xbox’s ads are not meant to interrupt the core gameplay; they will appear before the session begins.
In‑game ad formats tend to excel later in the marketing funnel, delivering stronger lifts in brand image, consideration, interest, and likeability. Combining both pre‑game and in‑game ads could theoretically give advertisers the best of both worlds, but it also risks provoking greater pushback from players who value an uninterrupted experience. Xbox has promised that its ads will be non‑intrusive. By placing them before the game starts, the company aims to preserve the immersive nature of the session.
This approach benefits both players—who avoid interruptions during play—and advertisers, who want their messages to be part of a positive experience rather than a nuisance. Relevance will be another key factor.
No gamer wants to see an ad for cat food when they don’t own a cat, or a promotion for a game they have already completed. Contextual, well‑targeted ads that make sense to the individual player will be essential to keep users from abandoning the service at the first sign of irrelevant content.
When ads are meaningful, they become a valuable platform for brands to reach new audiences without alienating gamers. Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to ads that appear before a game they already own. The second is whether the revenue generated will be sufficient to sustain the model over the long term.
Xbox CEO Asha Sharma’s decision to explore ad‑supported streaming reflects a willingness to experiment and take calculated risks, but only time will reveal whether the strategy pays off. Historically, many gaming ad campaigns have relied on a "watch an ad, get an extra life" model, where the ad provides a tangible in‑game benefit. Xbox’s proposition is different: players would watch an ad to gain access to a game they already possess.
Our current data set does not include direct evidence of how this trade‑off will be perceived, but broader research on ad‑format perception shows that descriptors such as "non‑intrusive" and "immersive" rank highly among positive responses. If Xbox can deliver ads that feel seamless and add value, these metrics will be critical to the initiative’s success. My forecast is that Xbox will not be the first nor the last platform to test this kind of hybrid model.
Advertising in games has existed for years, but it has rarely been designed with the player’s experience as the primary focus. Should Xbox manage to strike the right balance, it could pave the way for other developers and publishers to adopt similar strategies, ultimately making video games more affordable and accessible for everyday gamers.