Virginie Chesnais serves as Chief Marketing Officer at the ad‑technology analytics firm Happydemics. For years, many gamers have looked at in‑game advertising with suspicion, and their concerns are understandable.
The reputation of ads in video games is mixed at best: users often encounter redirects to unrelated websites or apps, deceptive messaging, or closing buttons that are hard to locate, all of which generate frustration. A recent study conducted by eMarketer highlighted that 52 percent of players would abandon a session if they ran into several intrusive ad elements. Losing half of an audience at the moment you’re trying to engage them is hardly an effective tactic.
However, advertisements do not have to be detrimental. 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 high‑quality and unobtrusive.
With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming continuing to climb, well‑crafted ads could find a welcoming niche within the medium. The argument for incorporating an ad‑for‑games model is more compelling than many assume, and it is partially validated by the success of linear media. Platforms such as Netflix, Disney+ and other streaming services have demonstrated that offering a lower‑price, ad‑supported tier can generate substantial revenue while still delivering a consistent product. Should Xbox’s experiment prove viable, it would not only preserve its subscription base but also unlock a previously untapped revenue stream at a moment when the brand is seeking fresh income sources.
This development matters because console gaming is increasingly positioned as a premium offering. Prices for games, consoles, peripherals and downloadable content keep rising, making it harder for the average consumer to justify the expense and creating a barrier for casual players. Xbox itself has stated that, when executed correctly, advertising can lower the cost of entry to gaming. Mobile gaming already shows that ad‑supported tiers give players a way to engage without paying large upfront fees, expanding the overall market.
Crucially, the model would be 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 hopes to keep its loyal community while simultaneously making games more approachable for newcomers.
Although there is no specific survey data on this particular announcement yet, it is reasonable to assume that most gamers would tolerate a 30‑second commercial if it granted them an hour of playtime on a favorite or new title. Xbox will likely have internal data confirming that assumption. 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 in terms of ad recall and attribution. Players are more likely to remember an ad they saw while gaming and correctly associate it with the sponsoring brand.
This is where Xbox’s “around‑the‑game” approach—ads displayed before the game launches rather than embedded within the gameplay—becomes intriguing. Our data indicate that these pre‑game placements achieve higher recall and attribution rates compared with intrinsic in‑game spots.
The distinction matters because, while we can often recall ads we encounter while watching TV or scrolling through feeds, those memories do not always translate into a clear brand link. Gaming appears to sit in a league of its own on this metric, which likely explains why companies such as Xbox and EA are increasingly exploring ad‑based gaming models. It is essential to note that Xbox’s ads will not interrupt the actual gameplay; they will appear prior to the session. In‑game ad formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest and likeability.
A hybrid strategy that blends pre‑game and in‑game placements could offer advertisers the best of both worlds, though it might also provoke greater pushback from players. Xbox has pledged that its advertisements will be non‑intrusive. By confining ads to the pre‑game window, the company aims to preserve the immersive experience that gamers value.
This approach benefits both the audience—who won’t have their play interrupted—and advertisers, who want their messages to feel like a natural part of the experience rather than a disturbance. Relevance will be key.
Nobody enjoys seeing an ad for cat food when they don’t own a cat, or promotions for games they have already completed. By delivering contextual, purposeful ads, Xbox can keep players from abandoning the session while giving brands an effective platform to reach fresh eyes. Nonetheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to pre‑game advertising; the second is whether the revenue generated will be sufficient to sustain the model over the long term.
The move toward ad‑supported game streaming reflects a bold strategy by Xbox CEO Asha Sharma, who has shown a willingness to experiment and take calculated risks. Only time will reveal whether the approach delivers the intended results. Historically, many gaming ad programs have been built around “watch an ad, earn an extra life” mechanics. Xbox’s proposal is different: it asks players to watch an ad to access a game they already own.
Our existing data set does not yet indicate how this will be received. Related research on ad‑format perception—where respondents who recall an ad are asked to describe the format—shows that terms like “non‑intrusive” and “immersive” rank among the most favorable descriptors. If Xbox and future adopters want to make gaming ads successful, these two attributes will be critical to monitor. My forecast is that Xbox will neither be the first nor the last company to test such a model.
Advertising in games has existed for a long time, 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 other developers and publishers, while simultaneously making video games more affordable and accessible for everyday gamers.