Virginie Chesnais serves as Chief Marketing Officer at the ad‑technology analytics firm Happydemics. For many years, gamers have approached in‑game advertising with suspicion, and their wariness is understandable.
The reputation of ads in video games is mixed; players often encounter redirects to unrelated websites or apps, misleading content, or dismiss buttons that are difficult to locate, all of which generate frustration. A recent study conducted by eMarketer highlighted that 52 % of gamers would abandon a session if they ran into several intrusive ad elements.
Losing half of an audience at the moment you are trying to engage them is hardly an effective approach. However, advertising does 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 advertisements were of a high standard.
With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of playing games continuing to climb, well‑crafted ads could find a receptive home in the gaming ecosystem. The argument for a modest advertising‑for‑games model is more compelling than many anticipate, and it has already been partially validated by linear media platforms. Services such as Netflix, Disney+, and other streaming giants have demonstrated that a dual‑tier model—offering both ad‑free and ad‑supported options—can generate substantial revenue while keeping a broad subscriber base. Should Xbox’s experiment succeed, it would not only preserve its paying subscribers but also unlock a fresh, previously untapped income stream at a moment when the brand is eager for additional cash flow.
This development matters because console gaming is increasingly being positioned as a premium offering. The price tags attached to games, consoles, accessories, and downloadable content are growing steeper, making it harder for the average consumer to justify the expense. In Xbox’s own announcement, the company emphasized that, when executed correctly, advertising can help lower the cost barrier to gaming. Mobile gaming has already shown that ad‑supported tiers can provide a gateway for players who are reluctant to make large upfront purchases.
Crucially, the system 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‑price or free tier.
By presenting a two‑track model, Xbox hopes to retain its loyal fan base while simultaneously expanding accessibility for newcomers. Although concrete survey data on this specific rollout is not yet available, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second advertisement if it granted them an hour of gameplay on a favorite or brand‑new title.
Xbox likely has internal insights that support this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America indicates that in‑game advertisements consistently outshine television, social media, and standard online ads in terms of recall and attribution. Players are more likely to remember an ad they saw while playing and correctly associate it with the sponsoring brand.
This is where Xbox’s “around‑the‑game” strategy—showing ads before the game launches rather than embedding them within the gameplay—becomes intriguing. Our data suggest that pre‑game placements generate higher recall and attribution scores compared with intrinsic in‑game spots. While traditional TV or social ads may be memorable, they do not always translate into a clear brand connection. Gaming appears to occupy a unique niche where the link between ad and brand is stronger, which explains why companies like Xbox and EA are increasingly exploring ad‑based models.
It is essential to note that Xbox’s ads will not interrupt the actual gameplay; they will appear prior to the start of the session. In‑game ad formats tend to excel further down the conversion funnel, delivering better outcomes for brand image uplift, consideration, interest, and overall likability. A hybrid approach—combining pre‑game and in‑game placements—could theoretically offer advertisers the best of both worlds, though it also risks greater pushback from players who value an uninterrupted experience.
Xbox has pledged that the advertisements will be non‑intrusive. By delivering ads before the gaming experience begins, the company aims to preserve immersion. This is beneficial not only for gamers but also for advertisers, who want their messages to complement rather than disrupt the user journey.
Relevance will be another key factor. No one enjoys seeing an ad for cat food when they don’t own a cat, or a promotion for a game they have already completed. Contextual, targeted ads that make sense for the player will help prevent immediate abandonment and give 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 a new advertising model; the second is whether the revenue generated will be sufficient to sustain the approach over the long term. The move toward ad‑supported game streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who appears willing to experiment with innovative monetisation strategies.
Only time will reveal whether this gamble pays off. Historically, many gaming ad campaigns have relied on “watch an ad, earn an extra life” mechanics. Xbox’s proposition differs: players would watch an ad to unlock access to a game they already own, a scenario not yet covered by our existing data.
However, broader research on ad format perception shows that descriptors such as “non‑intrusive” and “immersive” rank among the most positively received attributes. If Xbox—and potentially other platforms—can deliver ads that meet these criteria, they will be well‑positioned for success. My forecast is that Xbox will neither be the first nor the last company to test this model. Advertising in games is not new, 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.