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 the wariness is understandable.
The reputation of ads in video games is mixed at best, often marred by annoying redirects to external sites, misleading content, or close buttons that are difficult to locate. A recent study by eMarketer highlighted that 52 percent of players would abandon a game if they encountered multiple intrusive ad elements. Losing half of your audience at the moment you are trying to engage them is hardly a winning tactic. Nevertheless, advertising does not have to be a negative experience.
The same eMarketer 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. This suggests that, when executed properly, ads can enhance rather than detract from the gaming experience. Xbox is currently piloting an ad‑supported streaming service for games, and as the overall cost of playing continues to climb, well‑crafted advertisements could find a receptive home within the gaming ecosystem. The argument for introducing an advertising‑for‑games model is more compelling than many anticipate, especially when we look at the success of linear media platforms.
Services such as Netflix, Disney+, and other streaming giants have demonstrated that offering both ad‑free and ad‑supported tiers can generate substantial revenue while expanding the audience base. If Xbox’s experiment proves viable, it could not only preserve its subscription‑based revenue but also unlock an entirely new, previously untapped stream of income—something the brand could certainly use given its recent financial pressures. This development matters because console gaming is increasingly being positioned as a premium offering. The price tags attached to new consoles, flagship titles, accessories, and downloadable content are rising steadily, creating a financial hurdle for the average player.
Xbox itself has acknowledged that, when done correctly, advertising can lower the cost of access to games. The mobile gaming sector already provides evidence that ad‑supported tiers can invite players into the ecosystem without demanding a large upfront payment. Crucially, the proposed model would be entirely optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads, while those who are comfortable with occasional commercials could enjoy a reduced cost of entry.
By offering a two‑tier system, Xbox hopes to retain its core fan base while simultaneously making games more approachable for newcomers. Although concrete survey data on this specific initiative is not yet available, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second advertisement if it meant gaining an hour of playtime on a favorite or newly released title. Xbox’s internal research likely supports this hypothesis.
Data from Happydemics covering 285 in‑game campaigns across the United Kingdom and North America indicate that in‑game advertising consistently outperforms TV, social, and other online formats when it comes to ad recall and attribution. In other words, gamers are more likely to remember an ad they saw while playing and correctly associate it with the brand that served it. Xbox’s “around‑the‑game” approach—showing ads before the gameplay begins rather than embedding them within the game world—adds another layer of intrigue. Our research shows that these pre‑game placements achieve higher recall and attribution scores compared with ads that appear directly inside the game environment.
This distinction matters because, while we can often recall ads seen on television or scrolling through social media, we do not always link those impressions to the correct brand. Gaming appears to operate in its own league regarding this metric, which likely explains why companies like Xbox and EA are increasingly exploring ad‑based gaming models. It is important to note that Xbox’s ads would be pre‑game, not in‑game. Traditional in‑game formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and ad likability.
A hybrid strategy that combines both pre‑game and in‑game ads could theoretically offer the best of both worlds for advertisers, though it might also provoke greater resistance from players who are sensitive to interruptions. Xbox has pledged that any advertisements will be non‑intrusive.
By placing ads before the game starts, the company aims to preserve the immersive experience once gameplay begins. This approach benefits both players—who enjoy uninterrupted sessions—and advertisers, who want their messages to be part of the experience rather than a disruptive nuisance. Relevance will be key. No gamer wants to see an ad for cat food when they don’t own a cat, or an advertisement for a game they have already completed.
Contextual, targeted ads that make sense for the individual player will help prevent users from abandoning the session at the sight of an irrelevant commercial, while simultaneously giving brands a premium platform to reach new audiences. Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to the presence of ads, and the second is whether the revenue generated will be sufficient to justify a long‑term commitment to the model. 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 this gamble pays off. Historically, many of our gaming‑ad projects have revolved around “watch an ad, earn an extra life” type exchanges. Xbox’s proposal is different: it asks players to watch an ad in order to access a game they already own.
Our existing data set does not yet indicate how this will be received. However, broader research on ad format perception—where respondents who remember an ad are asked to select positive descriptors—has consistently highlighted “non‑intrusive” and “immersive” as top‑rated attributes.
If Xbox and future industry peers aim to make advertising in gaming a success, these two qualities will be essential metrics to monitor. My forecast is that Xbox will neither be the first nor the last company to experiment with such strategies. Advertising in games has existed for years, but rarely 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 models, ultimately making video games more affordable and accessible for everyday gamers.