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 the wariness is understandable.
The reputation of ads in video games is mixed at best, often plagued by frustrating experiences such as redirects to unrelated sites or apps, misleading content, and close‑buttons that are hard to locate. A recent study by eMarketer highlighted that 52 % of players would abandon a session if they encountered multiple intrusive ad elements. Losing half of an audience at the moment you’re trying to engage them is hardly an effective tactic. However, advertisements do not have to be a negative force.
The same research revealed that one in five gamers would actually play a title more often if the in‑game ads were high‑quality and well‑executed. With Xbox currently piloting an ad‑supported game‑streaming platform and the overall cost of gaming steadily climbing, there is a genuine opportunity for premium‑grade ads to find a comfortable niche within the medium. The argument for a hybrid "ads‑for‑games" model is more compelling than many anticipate, especially when we look at the success of linear media.
Services such as Netflix, Disney+, and other streaming giants have demonstrated that offering an ad‑supported tier can generate significant revenue while still delivering a reliable service. Should Xbox’s experiment prove viable, it could preserve its subscription base and simultaneously unlock a fresh, previously untapped income stream at a moment when the brand could use the financial boost.
The relevance of this development is underscored by the fact that console gaming is increasingly being positioned as a premium product. Prices for games, consoles, peripherals, and downloadable content continue to rise, creating a financial barrier for the average enthusiast. Xbox itself has stated that, when executed correctly, advertising can lower the cost of entry into gaming. The mobile‑gaming sector already offers a precedent: ad‑supported tiers allow players to engage without paying large upfront fees, expanding the market to users who might otherwise be excluded.
Importantly, the approach remains optional. Players who prefer an ad‑free experience can continue to do so by paying a subscription fee.
By offering a two‑tier system, Xbox hopes to keep its loyal fan base while also making games more reachable for newcomers. Although no concrete survey data exists on this specific launch yet, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second commercial if it granted them an hour of playtime on a favorite or newly released title. Xbox’s own analytics are likely to confirm this intuition. Happydemics’ data, drawn from 285 in‑game campaigns across the United Kingdom and North America, consistently shows that in‑game advertisements outperform television, social, and other online formats in terms of ad recall and attribution.
In other words, players are more likely to remember an ad seen within a game and correctly associate it with the brand that displayed it. This advantage becomes even more pronounced with "around‑the‑game" placements—ads shown before the game starts rather than embedded within the gameplay. Our research indicates that these pre‑game formats deliver superior recall and attribution compared with intrinsic in‑game spots. The distinction matters because while we may notice ads on TV or scrolling through feeds, those impressions do not always translate into brand linkage.
Gaming appears to operate in its own league regarding this metric, which likely explains why companies such as Xbox and Electronic Arts are exploring ad‑based models more aggressively. It is crucial to note that Xbox’s ads will not interrupt the gameplay itself; they will appear before the session begins. In‑game ad formats, by contrast, tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and overall likeability.
A combined strategy—leveraging both pre‑game and in‑game ads—could offer advertisers a powerful mix of benefits, though it might also provoke greater resistance from players who value uninterrupted immersion. Xbox has pledged that any advertisements will be non‑intrusive.
By placing ads prior to the start of a game, the company aims to preserve the immersive experience that gamers cherish. This consideration benefits both the audience and advertisers, as brands prefer their messages to be part of the experience rather than a disruptive interruption.
Relevance will be another key factor. No one enjoys seeing an ad for cat food when they don’t own a cat, or promotions for games they have already completed. By delivering context‑aware, targeted ads, Xbox can keep players from abandoning the session at the sight of an irrelevant commercial, while simultaneously offering brands an effective platform to reach new demographics. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how players will react to a pre‑game advertising model, and the second is whether the revenue generated will be sufficient to sustain the approach as a long‑term offering. The move toward ad‑supported streaming reflects a bold, risk‑taking attitude from Xbox CEO Asha Sharma, who appears willing to experiment with new business models.
Time will reveal whether the strategy pays off. Historically, our work in gaming advertising has centered on "watch an ad, earn an extra life" mechanics. Xbox’s proposal diverges by asking players to watch an ad to access a game they already own, a scenario not yet covered by our existing data set.
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 future adopters aim to make gaming ads successful, these two qualities will be essential focal points. My forecast is that Xbox will neither be the first nor the last platform to trial this model.
Advertising in video games has existed for years, but it has rarely been designed with the player’s experience as the primary concern. Should Xbox manage to strike the right balance, it could pave the way for other gaming companies to follow suit, ultimately making video games more affordable and accessible for the everyday player.