Virginie Chesnais serves as chief marketing officer at Happydemics, an ad‑technology analytics firm. For many years, gamers have viewed in‑game advertising with suspicion, and their wariness is understandable. The reputation of ads within games is mixed; players frequently encounter redirects to unrelated sites or apps, misleading content, or obscure close buttons that make it difficult to dismiss the ad. A recent study by eMarketer highlighted that 52 % of gamers would stop playing if they ran into several disruptive ad elements, indicating that losing half of an audience at the moment of engagement is far from an effective tactic.
Nevertheless, advertising does not have to be a negative experience. The same 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 insight comes at a time when Xbox is piloting a new ad‑supported game‑streaming service, and the overall cost of playing games continues to climb. In such an environment, well‑crafted advertisements could find a receptive home within the gaming ecosystem.
The argument for integrating a form of ad‑for‑games model is stronger than many anticipate, as linear media have already demonstrated its viability. Services like Netflix, Disney+, and other streaming platforms have proven that a dual‑tier approach—offering both ad‑free subscriptions and lower‑cost ad‑supported options—can generate significant revenue while expanding the audience base. Should Xbox’s experiment prove successful, it would not only preserve its paying subscriber base but also unlock a fresh, previously untapped revenue stream at a moment when the brand is eager for new income sources.
This development matters because console gaming is increasingly positioning itself as a premium offering. The price tags attached to games, consoles, accessories, and downloadable content are growing, making it harder for the average consumer to justify the expense. Xbox itself has noted that, when executed correctly, advertising can lower the barrier to entry for gamers. The mobile gaming sector already illustrates how ad‑supported tiers can invite players into the ecosystem without demanding large upfront payments.
Crucially, participation would be optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads, while those who are willing to tolerate a short commercial break could enjoy a reduced cost. By providing a two‑tier system, Xbox aims to keep its loyal fan base intact while simultaneously making games more accessible to newcomers.
Although specific survey data on this particular initiative are not yet available, it is reasonable to assume that a large majority of gamers would accept a 30‑second advertisement if it meant gaining an hour of playtime on a beloved or new title. Xbox’s internal analytics are likely to confirm this hypothesis.
Happydemics’ research, covering 285 in‑game campaigns across the United Kingdom and North America, shows 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 saw while gaming and correctly associate it with the sponsoring brand. This advantage becomes even more pronounced with “around‑the‑game” placements—ads displayed before a game starts rather than embedded within the gameplay itself. Our data indicate that these pre‑game formats achieve higher recall and attribution scores compared with intrinsic in‑game placements.
The distinction matters because, while we can often recall ads seen on TV or scrolling through feeds, we do not always link them to the appropriate brand. Gaming appears to occupy a unique position where ad recall translates directly into brand association, a factor that likely explains why companies such as Xbox and Electronic Arts are exploring ad‑based models more aggressively. It is important to note that Xbox’s ads are intended to appear pre‑game, not during the gameplay.
In‑game ad formats tend to excel further down the marketing funnel, delivering stronger lifts in brand image, consideration, interest, and likeability. A hybrid approach—combining pre‑game and in‑game ads—might offer advertisers the best of both worlds, though it could also provoke greater resistance from players who dislike interruptions. Xbox has pledged that its advertisements will not be intrusive.
By placing ads before the game launches, the company hopes to preserve the immersive experience that gamers cherish. This approach benefits both players, who avoid mid‑session interruptions, and advertisers, who want their messages to complement rather than disrupt the user journey. Relevance will be key.
Nobody wants to see an ad for cat food when they don’t own a cat, or a promotion for a game they have already completed. Contextual, well‑targeted ads can keep players engaged rather than prompting them to quit the experience, while simultaneously giving brands a powerful platform to reach fresh audiences. 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 toward ad‑supported game streaming reflects the boldness of Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with unconventional strategies. Only time will reveal whether this gamble pays off.
Historically, many gaming ad campaigns have relied on a "watch an ad, earn an extra life" premise. 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 capture how this specific trade‑off will be perceived.
Research on ad format perception, however, offers some optimism. When participants who recall an ad are asked to describe the format, "non‑intrusive" and "immersive" consistently rank among the top positive descriptors.
If Xbox—and potentially other platforms in the future—can deliver ads that meet these criteria, they will likely succeed in balancing revenue generation with player satisfaction. In my view, Xbox will neither be the first nor the last company to experiment with this model. Advertising in games has existed for years, but it has rarely been designed with the player’s experience as the primary focus.
Should Xbox manage to make this approach work, it could pave the way for other gaming companies to follow, ultimately making video games more affordable and accessible for everyday gamers.