Virginie Chesnais serves as chief marketing officer at Happydemics, an analytics platform that tracks advertising technology. For many years, gamers have been skeptical about the presence of advertisements within games, and their concerns are not unfounded.
In‑game ads have earned a mixed reputation, often being associated with redirects to unrelated sites, misleading content, or poorly designed close buttons that frustrate users. 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 moment you are trying to engage them is hardly an effective approach. However, advertisements do not have to be a nuisance. The same research indicated 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. Xbox is currently piloting an ad‑supported game‑streaming service at a time when the overall cost of gaming is climbing steadily.
In this environment, well‑crafted ads could find a receptive home within the gaming ecosystem. The argument for incorporating a form of ad‑for‑games model is stronger than many assume, and it has already been demonstrated in the world of linear media. Services such as Netflix, Disney+, and other streaming platforms have shown that offering both ad‑free and ad‑supported tiers can generate substantial revenue while keeping a broad subscriber base. Should Xbox’s experiment succeed, it could not only preserve its paying customers but also unlock a fresh, previously untapped source of income—a development the brand could greatly benefit from right now.
The relevance of this shift becomes clearer when we consider that console gaming is increasingly positioned as a premium experience. Prices for games, consoles, accessories, and downloadable content continue to rise, creating a financial barrier for the average player.
Xbox itself has stated that, when executed correctly, advertising can lower the cost of entry to gaming. Mobile gaming already illustrates how ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases.
Importantly, the proposed system would be entirely optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those who are comfortable with occasional ads could access games at a reduced cost.
By offering a two‑tier model, Xbox aims to retain its loyal fan base while simultaneously making games more approachable for newcomers. Although concrete survey data on this specific initiative are not yet available, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second commercial if it meant gaining an hour of playtime on a favorite or newly released title.
Xbox likely has internal data that supports this hypothesis. Happydemics has analyzed 285 in‑game campaigns across the United Kingdom and North America, finding that in‑game advertisements consistently outperform television, social media, and other online formats in terms of recall and attribution. Players are more likely to remember an ad they see while gaming and to correctly associate it with the sponsoring brand.
This advantage becomes even more pronounced when ads are placed “around the game”—for example, during the loading screen or before gameplay begins—rather than embedded directly within the game world. Our data show that these pre‑game placements achieve higher recall and attribution scores compared with intrinsic in‑game placements. The distinction matters because, while many ads on TV or social feeds are memorable, they do not always translate into a clear brand connection.
Gaming appears to occupy a unique niche where both recall and brand linkage are strong, which likely explains why companies like Xbox and EA are increasingly exploring ad‑based models. It is also crucial to note that Xbox’s ads will not interrupt the gameplay itself; they will appear before the game starts.
In‑game ad formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and likability. A combined strategy—leveraging both pre‑game and in‑game ads—could provide advertisers with a powerful toolkit, though it may also invite greater resistance from players if not handled delicately. Xbox has emphasized that the advertisements will be non‑intrusive.
By placing them before the actual gaming session, the immersive experience remains intact. This approach benefits both players, who avoid disruption, and advertisers, who want their messages to be part of a seamless experience rather than a jarring interruption.
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 immediate abandonment and give brands an effective platform to reach new audiences.
Nevertheless, Xbox is navigating uncharted waters. The first uncertainty concerns how players will react to this new advertising model; the second revolves around whether the revenue generated will be sufficient to sustain the approach over the long term. The decision to explore ad‑supported streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, but only time will reveal whether the strategy delivers the intended results.
Historically, many gaming ad campaigns have followed a "watch an ad, earn an extra life" paradigm. Xbox’s proposal differs: 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. However, broader research on ad format perception shows that descriptors such as "non‑intrusive" and "immersive" rank among the most favorable.
If Xbox—and potentially other platforms in the future—wish to make gaming ads a success, these two attributes will be critical metrics to monitor. In my view, Xbox will neither be the first nor the last to experiment with this model.
Advertising in games has existed for years, 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 similar initiatives across the industry, ultimately making video games more affordable and accessible for everyday gamers.