Virginie Chesnais serves as Chief Marketing Officer at Happydemics, a platform that specializes in ad‑tech analytics. 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 at best; players often encounter redirects to unrelated websites or apps, misleading content, and close buttons that are difficult to locate, all of which contribute to a frustrating experience.
A recent study conducted by eMarketer revealed that 52 percent of respondents would abandon a game if they ran into several intrusive advertising elements. Losing half of your audience at the very moment you are trying to engage them is hardly an effective strategy.
However, the same research also highlighted a more optimistic scenario: one in five gamers indicated they would play a title more often if the in‑game advertisements were of high quality and well integrated. This insight arrives at a time when Xbox is piloting an ad‑supported game‑streaming service, and the overall cost of gaming continues to climb. In such an environment, well‑crafted advertisements could find a receptive home within the gaming ecosystem. The rationale for introducing an ad‑for‑games model is more compelling than many assume, especially when we look at the success of linear media.
Services such as Netflix, Disney+, and other streaming platforms have demonstrated that offering both subscription‑free, ad‑supported tiers and premium, ad‑free options can generate substantial revenue while expanding the audience base. Should Xbox’s experiment prove viable, it could not only preserve its existing subscriber pool but also unlock a fresh revenue stream—something the brand could certainly use given the current financial pressures. Console gaming is increasingly being positioned as a premium experience. Prices for games, consoles, accessories, and downloadable content have risen steadily, making it harder for the average consumer to justify the expense.
This price inflation creates a barrier that excludes many potential players from the hobby. Xbox itself has stated that, when executed correctly, advertising can lower the cost of entry to gaming. The mobile‑gaming sector already provides a clear example: ad‑supported tiers enable players to enjoy games without paying large upfront fees, thereby widening the market.
Crucially, any advertising model Xbox adopts would be optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads, while those willing to tolerate a short commercial break could enjoy a lower‑cost or even free entry point.
By offering a two‑tier system, Xbox aims to keep its loyal fan base happy while simultaneously making games more accessible to newcomers. Although we lack concrete survey data on the newest Xbox announcement, it is reasonable to assume that most gamers would tolerate a 30‑second advertisement if it granted them an hour of gameplay on a favorite or new title. Xbox’s internal research likely supports this hypothesis.
Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that in‑game ads consistently outperform traditional TV, social, and online placements when it comes to recall and attribution. In other words, players are more likely to remember an ad they saw while gaming and correctly associate it with the brand that displayed it. This is where Xbox’s “around‑the‑game” approach becomes intriguing. Instead of embedding ads within the gameplay itself, Xbox plans to serve commercials before the game launches.
Our data indicate that such pre‑game formats achieve higher recall and attribution scores compared with ads that appear directly inside the game environment. The distinction matters because, while we can often recall ads seen on television or scrolling through a social feed, that recall does not always translate into a clear brand connection.
Gaming appears to occupy a unique niche where ad recall and brand linkage are both strong, which likely explains why companies like Xbox and EA are exploring ad‑based monetization models. It is important to note that Xbox’s ads will not interrupt the actual gameplay; they will be shown before the session begins. In‑game ad formats do have advantages further down the conversion funnel, such as boosting brand image, consideration, interest, and overall likability.
A hybrid strategy that combines both pre‑game and in‑game placements could offer advertisers the best of both worlds, though it also risks provoking greater resistance from players. Xbox has pledged that any advertisements will be non‑intrusive. By placing ads before the game starts, the company hopes to preserve the immersive experience that gamers cherish. This approach benefits both the player—who enjoys an uninterrupted session—and the advertiser, who wants their message delivered in a context that feels natural rather than disruptive.
Relevance will be key. No gamer 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, targeted ads that make sense to the viewer will help prevent users from abandoning the experience at the first sign of a commercial. 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 game streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has shown a willingness to experiment with new business models. Only time will reveal whether this gamble pays off. Historically, many of our gaming‑ad projects have revolved around “watch an ad, earn an extra life” mechanics.
Xbox’s proposal is different: it asks players to watch an ad to access a game they already own. Our current data set does not provide a clear answer on how this will be received. However, broader research on ad‑format perception indicates that when respondents are asked to describe ads they remember, terms such as “non‑intrusive” and “immersive” consistently rank among the most favorable.
If Xbox—and potentially other platforms—are to make advertising a lasting component of gaming, these two attributes will be essential to monitor. My forecast is that Xbox will neither be the first nor the last platform to experiment with this model. Advertising in games has existed for years, but it has often been implemented without the player’s experience as a primary consideration.
Should Xbox manage to strike the right balance, it could pave the way for similar initiatives across the industry and, importantly, make video games more affordable and accessible for everyday gamers.