Virginie Chesnais serves as Chief Marketing Officer at the ad‑tech analytics firm Happydemics. For many years, gamers have approached in‑game advertising with suspicion, and that wariness is not unfounded.
The reputation of ads in interactive entertainment is mixed at best; players often encounter redirects to unrelated sites or apps, misleading creative, and dismissive close buttons that are hard to locate, all of which breed frustration. A recent study conducted by eMarketer highlighted that 52 % of respondents would abandon a game if they ran into several intrusive advertising elements. Losing half of an audience at the moment you are trying to engage them is hardly an effective tactic.
Nevertheless, advertising does not have to be a detriment. 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 relevance. This suggests a potential sweet spot where ads add value rather than merely interrupt the experience. Xbox is currently piloting an ad‑supported game‑streaming service, and at a time when the overall cost of playing continues to climb, well‑crafted ads could find a welcoming home within the gaming ecosystem.
The argument for a hybrid "ads‑for‑games" model is more compelling than many assume, especially when we look at the success of linear media platforms. Services such as Netflix, Disney+, and others have demonstrated that offering a lower‑priced, ad‑supported tier can generate a substantial new revenue stream while still preserving a premium, ad‑free option for subscribers.
If Xbox’s experiment proves viable, it could not only keep its paying members happy but also unlock a previously untapped source of income—something the brand could certainly use. The relevance of this development is underscored by the fact that console gaming is increasingly being positioned as a premium product.
Prices for games, consoles, accessories, and downloadable content have risen steadily, creating a financial barrier for the average enthusiast. Xbox itself has acknowledged that, when executed correctly, advertising can reduce the cost of entry for players. Mobile gaming already provides a clear precedent: ad‑supported tiers allow users to experience games without the need for large upfront purchases, broadening the market and encouraging greater participation.
Crucially, the approach is entirely optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads, while those who are comfortable with occasional commercials can enjoy a lower‑cost entry point. By offering a two‑tier system, Xbox hopes to retain its loyal fan base while simultaneously making games more attainable for newcomers.
Although no formal survey data exists yet on this particular rollout, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second advertisement if it meant gaining access to a beloved title or a new release for an hour of playtime. Xbox’s internal data likely supports this hypothesis. Happydemics has analyzed 285 in‑game campaigns across the United Kingdom and North America, finding that in‑game advertisements consistently outperform TV, social, and other online formats when it comes to recall and attribution.
Players are more likely to remember an ad they saw while gaming and correctly associate it with the sponsoring brand. Moreover, the "around‑the‑game" format—ads displayed before the game launches rather than embedded within the gameplay—shows an even stronger edge in recall and attribution compared with intrinsic in‑game placements.
This distinction matters because, while we can often recall ads seen on television or scrolling through social feeds, those memories do not always translate into brand recognition. Gaming appears to be in a league of its own for this metric, which explains why companies such as Xbox and EA are increasingly exploring ad‑based models. It is essential to note that Xbox’s ads are planned to be pre‑game, not woven into the gameplay itself. Traditional in‑game ad formats tend to excel further down the conversion funnel, delivering higher lifts in brand image, consideration, interest, and likability.
A combined strategy that leverages both pre‑game and in‑game ads could theoretically offer advertisers the best of both worlds, though it also risks greater pushback from players who value an uninterrupted experience. Xbox has pledged that any advertising will be non‑intrusive. By placing ads before the game begins, the company aims to preserve the immersive nature of the actual play session.
This approach benefits both gamers—who avoid interruptions during gameplay—and advertisers, who want their messages to be part of a seamless experience rather than a disruptive nuisance. Relevance will be another critical factor.
No one enjoys seeing an advertisement for cat food when they do not own a cat, or for a game they have already completed. Contextual, well‑targeted ads that make sense in the moment will help ensure players do not abandon the session at the sight of an irrelevant commercial, while simultaneously providing brands with a high‑impact platform to reach fresh audiences. Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to this new ad model; the second is whether the revenue generated will be sufficient to sustain the approach over the long term.
The decision to explore ad‑supported streaming reflects a willingness by Xbox CEO Asha Sharma to experiment and take calculated risks, but only time will reveal whether the strategy pays off. Historically, many gaming ad campaigns have relied on the classic "watch an ad, earn an extra life" mechanic. Xbox’s proposal diverges by asking players to watch an ad simply to access a game they already own. Our existing data set does not yet indicate how this will be received.
Research on ad‑format perception does, however, provide some optimism. When participants who remembered an ad were asked to describe the format, terms like "non‑intrusive" and "immersive" ranked among the most positive descriptors.
If Xbox—and potentially other platforms in the future—aim to make gaming ads successful, these two attributes will be essential metrics to monitor. In my view, Xbox will not be the first nor the last company to test such a model.
Advertising has been part of gaming for many years, but rarely with the player experience as the central focus. 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 more affordable and accessible for everyday players.