Virginie Chesnais serves as the 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 that wariness is understandable. The reputation of ads within video games is mixed at best, with common complaints ranging from redirects to unrelated websites or apps, misleading content, and the frustration of missing or hard‑to‑find close buttons. A recent study conducted by eMarketer highlighted that 52 % of players would abandon a game if they encountered several intrusive ad elements.
Losing half of an audience at the very moment you’re trying to engage them is hardly an effective tactic. However, advertisements do not have to be detrimental. The same survey 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 on the rise, well‑crafted ads could find a welcoming niche within the ecosystem.
The argument for a hybrid "ads‑for‑games" model is more compelling than many anticipate, especially when we look at the success of linear media. Platforms such as Netflix, Disney+, and other streaming services have demonstrated that offering an ad‑supported tier can generate significant revenue while still delivering a consistent user experience.
Should Xbox’s experiment prove viable, it would not only preserve its subscriber base but also unlock a previously untapped income stream—something the brand could certainly use at this juncture. This development matters because console gaming is increasingly being positioned as a premium offering. The price tags attached to games, consoles, accessories, and downloadable content continue to climb, creating a financial barrier for the average consumer. Xbox itself has acknowledged that, when executed properly, advertising can help lower the cost of entry for gamers.
We have already observed in the mobile‑gaming sector that ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases. Importantly, participation in such a tier remains optional; players who prefer an ad‑free experience can still access the service by paying a subscription fee. By offering a two‑tier system, Xbox aims to keep its loyal fan base satisfied while simultaneously making games more approachable for newcomers. Although no specific survey data on this latest announcement is available yet, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second advertisement if it granted them an hour of gameplay on a favorite or brand‑new title.
Xbox likely has internal data that supports this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that in‑game advertising consistently outperforms television, social media, and other online formats when it comes to ad 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. The "around‑the‑game" approach that Xbox is exploring—ads displayed before the game starts rather than embedded within the gameplay—adds another layer of intrigue.
Our data indicate that these pre‑game placements achieve higher recall and attribution scores compared with ads that appear directly inside the game world. This distinction is important because, while we might recall a commercial that pops up while watching TV or scrolling through a feed, we do not always link that memory to a specific brand.
Gaming appears to operate in its own league regarding this metric, which likely explains why companies like Xbox and EA are increasingly experimenting with ad‑based models. It is crucial to note that Xbox’s ads are intended to 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 overall likability. A blended strategy that combines both pre‑game and in‑game ads could theoretically offer advertisers the best of both worlds, though it might also provoke greater resistance from players. Xbox has pledged that any advertisements will be non‑intrusive.
By placing ads before the game launches, the company aims to preserve the immersive experience that gamers value. This approach benefits both the player—who enjoys uninterrupted gameplay—and the advertiser, who wants their message to be part of the experience rather than a disruption. Relevance will be key.
No one wants to see an advertisement for cat food if they don’t own a cat, or a promotion for a game they have already completed. By ensuring ads are contextually appropriate and provide a clear rationale for being shown, Xbox can minimize the risk of players abandoning the session while giving brands an effective platform to reach new audiences. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how gamers will react to this new format; the second is whether the ad revenue generated will be sufficient to justify a long‑term strategy. The move toward ad‑supported streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with novel ideas.
Only time will reveal whether this gamble pays off. Historically, many of our gaming‑ad projects have revolved around "watch an ad, earn an extra life" mechanics.
Xbox’s proposition is different: players would watch an ad to access a game they already own. Our existing data set does not yet tell us how this will be received. Nevertheless, research on ad‑format perception shows that respondents often describe non‑intrusive and immersive ads with positive adjectives. If Xbox—and potentially other platforms—are to make advertising a lasting component of gaming, they will need to prioritize these two qualities.
My forecast is that Xbox will neither be the first nor the last to test such a model. Advertising in games has existed for years, but it has rarely been designed with the player’s experience at its core. Should Xbox succeed, it could pave the way for other gaming companies to adopt similar strategies, ultimately making video games more affordable and accessible for the everyday gamer.