Virginie Chesnais serves as chief marketing officer at Happydemics, an analytics platform that focuses on advertising technology. For many years, gamers have looked at in‑game advertising with suspicion, and there are good reasons for that wariness.
Common complaints include redirects that whisk users away to unrelated sites or apps, misleading creative, and close buttons that are difficult to locate, all of which create a frustrating experience. A recent study conducted by eMarketer highlighted the severity of the problem: more than half—52 %—of respondents said they would stop playing a title if they encountered a series of intrusive ads. Losing half of your audience at the very moment you try to engage them is hardly a winning formula. However, advertising does not have to be synonymous with irritation.
The same research revealed a more optimistic finding: one in five gamers indicated they would actually play a game more often if the ads presented were of high quality and felt appropriate to the experience. This insight arrives at a moment when Xbox is piloting a new ad‑supported game‑streaming service, and the overall cost of gaming continues to climb. In such an environment, well‑crafted advertisements could find a welcoming home within the gaming ecosystem.
The rationale for a hybrid "ads‑for‑games" model is more compelling than many industry observers assume, and it is already validated to some extent by the success of linear media. Platforms such as Netflix, Disney+, and other video‑streaming services have demonstrated that offering both a premium, ad‑free tier and a lower‑price, ad‑supported tier can generate substantial revenue while expanding the audience base. If Xbox’s experiment proves profitable, it could not only preserve its existing subscriber pool but also unlock a fresh, previously untapped revenue stream—something the brand could certainly use at this juncture.
The importance of this development is underscored by the fact that console gaming is increasingly being positioned as a premium service. Prices for new releases, hardware, accessories, and downloadable content have all risen steadily, creating a financial barrier for the average player.
Xbox itself has acknowledged that, when executed correctly, advertising can help lower the cost of entry to gaming. Mobile gaming already offers a clear precedent: ad‑supported tiers allow players to access games without paying a large upfront fee, thereby broadening the market. Crucially, the model remains optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads.
By providing a two‑tier system, Xbox hopes to keep its core fan base satisfied while simultaneously making games more affordable for newcomers. Although we lack direct survey data on the specific announcement, it is reasonable to assume that a large majority of gamers would tolerate a brief 30‑second advertisement if it meant they could enjoy an hour of their favorite title or a brand‑new game. Xbox will likely have internal data confirming this hypothesis.
Happydemics has analyzed 285 in‑game campaigns across the United Kingdom and North America, finding that in‑game ads consistently outperform television, social, and other online formats when it comes to recall and attribution. Players are more likely to remember an ad they saw while playing and to correctly associate it with the sponsoring brand. This is where Xbox’s "around‑the‑game" strategy becomes intriguing.
Rather than embedding ads directly within the gameplay, the company plans to display them before the session begins. Our data indicate that these pre‑game placements achieve higher recall and attribution scores than ads that appear inside the game environment. The distinction matters because, while we can often remember an ad that pops up on TV or in a social feed, we do not always link it to the brand that delivered it.
Gaming appears to excel in this metric, which likely explains why companies such as Xbox and EA are increasingly exploring ad‑based revenue models. It is also worth noting that Xbox’s ads are not meant to interrupt the actual gameplay; they will appear prior to launch. In‑game ad formats tend to excel further down the marketing funnel, delivering stronger lifts in brand image, consideration, interest, and likeability.
A blended approach—combining pre‑game and in‑game ads—could theoretically give advertisers the best of both worlds, but it also risks provoking greater pushback from players who value an uninterrupted experience. Xbox has pledged that its advertisements will be non‑intrusive. By placing them before the game starts, the company aims to preserve the immersive nature of the session.
This consideration benefits both gamers, who can enjoy a seamless experience, and advertisers, who want their messages to be part of the experience rather than a disruptive nuisance. Relevance will be key. No player wants to see an ad for cat food if they don’t own a cat, or a promotion for a game they have already completed.
Contextual, targeted ads that make sense for the individual gamer will help prevent users from abandoning the session at the sight of an irrelevant spot. Nevertheless, 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 to explore ad‑supported streaming appears to be a calculated risk taken by Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with bold ideas. Only time will reveal whether this strategy delivers the intended outcomes.
Historically, many gaming ad campaigns have relied on a "watch an ad, earn an extra life" mechanic. Xbox’s proposal is different: it asks players to view an advertisement in order to access a game they already own. Our existing data set does not yet show how this particular trade‑off will be received.
Related research on ad format perception indicates that when respondents recall an ad, they often describe the experience as "non‑intrusive" and "immersive"—the two most popular positive descriptors. Should Xbox, and potentially other platforms, aim to make gaming ads a lasting success, these two attributes will be critical performance indicators. My forecast is that Xbox will neither be the first nor the last company to test such a model. Advertising in video games has existed for many years, but it has rarely been designed with the player’s comfort as the primary focus.
If Xbox can strike the right balance, it could open the door for other developers and publishers to adopt similar approaches, ultimately making video games more accessible to everyday gamers worldwide.