Virginie Chesnais serves as chief marketing officer at the ad‑tech analytics firm Happydemics. For many years, gamers have viewed in‑game advertising with suspicion, and that wariness is understandable. The reputation of ads in video games is mixed at best; players often encounter redirects to unrelated websites or apps, misleading content, or closing buttons that are hard to locate, all of which generate frustration. A recent study by eMarketers highlighted that 52 percent of gamers would abandon a session if they ran into several intrusive ad elements.
Losing half of your audience at the moment you are trying to engage them is hardly an effective approach. Nevertheless, advertisements do not have to be a negative experience.
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 of high quality and relevance. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming steadily climbing, well‑crafted ads could find a receptive home in the console ecosystem.
The argument for a modest ad‑for‑games model is more compelling than many assume, especially when we look at the success of linear media. Platforms such as Netflix, Disney+ and other streaming services have demonstrated that offering an ad‑supported tier can generate a solid revenue stream while still delivering a consistent product. If Xbox’s experiment proves viable, it could not only preserve its paying subscriber base but also unlock a brand‑new source of income at a moment when the company is eager for fresh cash flow.
This development matters because console gaming is increasingly positioning itself as a premium offering. Prices for games, consoles, accessories, and downloadable content have risen to levels that many casual players find difficult to justify, effectively creating a barrier to entry for the average gamer. Xbox itself has stated that, when executed correctly, advertising can help lower the cost of accessing games.
The mobile‑gaming sector already shows that ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases. Crucially, the model remains optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads. By delivering a two‑tier system, Xbox hopes to keep its loyal fan base happy while simultaneously making games more affordable for newcomers.
Although there is no concrete survey data on this specific announcement yet, it is reasonable to bet that a large majority of gamers would tolerate a 30‑second commercial if it meant gaining an hour of playtime on a favorite or brand‑new title. Xbox’s internal research is likely to confirm this intuition. Happydemics analyzed 285 in‑game campaigns across the United Kingdom and North America and found that in‑game advertising consistently outperforms television, social‑media, and other online formats in terms of ad recall and attribution. In other words, gamers are more likely to remember an ad they saw while playing and to correctly associate it with the sponsoring brand.
Xbox’s “around‑the‑game” strategy—showing ads before the gameplay begins rather than embedding them within the game world—adds another layer of advantage. Our data indicate that pre‑game placements generate higher recall and attribution scores than intrinsic in‑game spots. Why does this matter?
While we can often recall ads that appear on TV or in our social feeds, those memories do not always translate into a clear brand connection. Gaming appears to be in a league of its own for this metric, which explains why companies like Xbox and EA are increasingly exploring ad‑based monetisation. It is important to note that Xbox’s ads are not in‑game; they are pre‑game.
Traditional in‑game formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and likeability. A hybrid approach that combines both pre‑game and in‑game ads could be ideal for advertisers, though it may also provoke greater pushback from players. Xbox has promised that any advertising will be non‑intrusive.
By placing commercials before the game starts, the platform aims to preserve the immersive experience once gameplay begins. This is a key consideration not only for gamers but also for advertisers, who want their messages to complement rather than disrupt the user journey. Relevance will be another crucial factor.
Nobody enjoys being served a cat‑food commercial when they don’t own a cat, or an advertisement for a game they have already completed. By delivering contextual, audience‑specific ads, Xbox can keep players from abandoning the session while giving brands a highly effective platform to reach new consumers. 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 decision to explore ad‑supported streaming reflects the boldness of Xbox CEO Asha Sharma, who has shown a willingness to experiment with unconventional strategies. Only time will reveal whether this gamble pays off. Historically, our work in gaming advertising has centred on “watch an ad, earn an extra life” type exchanges.
Xbox, by contrast, is asking players to view an ad simply 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 when respondents are asked to describe ads they remember, terms like “non‑intrusive” and “immersive” frequently emerge as the most positive descriptors. If Xbox—and potentially other platforms in the future—are to make gaming ads a lasting success, these two attributes will need to be closely monitored.
My forecast is that Xbox will not be the first nor the last to trial such a strategy. Advertising in games has existed for many 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 accessible to everyday gamers.