Virginie Chesnais serves as Chief Marketing Officer at Happydemics, an analytics platform for advertising technology. For years, many gamers have been skeptical about the presence of advertisements within video games, and that skepticism is not unfounded. The reputation of in‑game ads is mixed, often marred by experiences such as being redirected to unrelated websites or apps, encountering misleading content, or struggling to locate a tiny close button. These irritations have left a sour taste for many players.
A recent study by eMarketer highlighted that 52 % of gamers would abandon a session if they ran into multiple disruptive ad elements. Losing half of the audience at the moment you are trying to engage them is hardly an effective strategy.
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 advertisements were of high quality and well integrated. This insight arrives at a time when Xbox is experimenting with a new ad‑supported game‑streaming service, and when the overall cost of playing games continues to climb. High‑caliber ads could therefore find a welcoming home in the gaming ecosystem.
The argument for a modest ad‑for‑games model is stronger than many anticipate, and it has already been partially validated by the linear‑media world. Services such as Netflix, Disney+, and other streaming platforms have demonstrated that a steady subscription revenue stream can coexist with an ad‑supported tier that attracts price‑sensitive consumers. If Xbox’s experiment proves viable, the company could not only preserve its paying subscriber base but also unlock a fresh, previously untapped source of income—something the brand could certainly use at this juncture. The relevance of this development is underscored by the fact that console gaming is increasingly 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 and erecting a barrier for casual or new gamers. Xbox itself has stated that, when executed correctly, advertising can lower the cost of access to gaming experiences.
Mobile gaming already shows that ad‑supported tiers can provide an entry point for players who are unwilling or unable to make large upfront purchases. By offering a similar model on consoles, Xbox could broaden its reach. Crucially, the system would remain optional.
Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads. This two‑tier approach aims to keep loyal fans happy while simultaneously making games more approachable for newcomers. Although no formal survey data exists yet on this particular rollout, it is reasonable to assume that the majority of gamers would tolerate a 30‑second advertisement if it granted them an hour of playtime on a favorite or brand‑new title.
Xbox likely has internal data supporting this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America indicates that in‑game ads consistently outperform television, social, and other online formats in terms of recall and attribution.
In other words, players are more likely to remember an ad they see while gaming and to correctly associate it with the sponsoring brand. This is where Xbox’s “around‑the‑game” strategy—ads that appear before the game starts rather than embedded within the gameplay—becomes intriguing. Our data show that pre‑game placements generate higher recall and attribution scores compared with intrinsic in‑game placements. The distinction matters because, while we can often recall ads that flash on TV or scroll through our feeds, we do not always link those impressions to a specific brand.
Gaming appears to occupy a unique niche where recall translates directly into brand association, which explains why companies like Xbox and EA are increasingly exploring ad‑based models. It is important to note that Xbox’s ads are not embedded within the gameplay itself; they are pre‑game. Traditional in‑game formats tend to excel later in the funnel, delivering stronger lifts in brand image, consideration, interest, and likeability. A hybrid approach—combining pre‑game and in‑game ads—could theoretically offer advertisers the best of both worlds, though it might also provoke greater pushback from players.
Xbox has pledged that its ads will be non‑intrusive. By placing advertisements before the actual gaming session, the company hopes to preserve the immersive experience once gameplay begins. This consideration benefits both the player, who enjoys uninterrupted immersion, and the advertiser, who wants the campaign to feel like a natural part of the experience rather than a disruptive interruption. Relevance will be key.
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. By delivering contextual, purposeful ads, Xbox can keep players from abandoning the session while giving brands a highly effective platform to reach new audiences.
Nevertheless, Xbox is navigating uncharted waters. The first unknown is how players will react to this new ad format; the second is whether the revenue generated will justify making the model a permanent fixture. 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 innovative ideas.
Only time will reveal whether the strategy delivers the intended results. Historically, many gaming ad campaigns have been built around 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, a scenario not yet captured in our existing data sets. However, broader research on ad format perception shows that when respondents recall an ad, they often describe it as "non‑intrusive" and "immersive"—the two most popular positive descriptors.
If Xbox and future adopters aim to make gaming ads successful, these two metrics will be crucial to monitor. My forecast is that Xbox will neither be the first nor the last platform to test such a model.
Advertising in games has existed for a long time, but rarely with the player’s experience as the primary focus. Should Xbox succeed, it could pave the way for other gaming companies to follow suit, ultimately making video games more affordable and accessible for the everyday gamer.