Virginie Chesnais serves as the chief marketing officer at Happydemics, an ad‑technology analytics firm. For many years, gamers have viewed in‑game advertising with suspicion, and their concerns are not unfounded. The reputation of ads in video games is mixed, often marred by intrusive redirects, misleading content, or hard‑to‑find close buttons that frustrate players.
A recent study conducted by eMarketer highlighted that 52 % of gamers would abandon a session if they encountered multiple disruptive ad elements. Losing half of an audience at the moment you are trying to engage them is hardly an effective approach. Yet, 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 playing games continuing to climb, there is a genuine opportunity for well‑executed ads to find a comfortable niche within the gaming ecosystem. The logic behind offering an ad‑for‑games model is more compelling than many might assume, and it has already been demonstrated to some extent by linear media.
Services such as Netflix, Disney+, and other streaming platforms have shown that a hybrid model—offering both ad‑free subscriptions and lower‑cost, ad‑supported tiers—can generate substantial revenue while expanding the audience base. Should Xbox’s experiment prove successful, it would not only preserve its existing subscriber base but also unlock a fresh, previously untapped source of income 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 product. The price tags on games, consoles, accessories, and downloadable content have risen steadily, making it harder for the average consumer to justify the expense.
Xbox itself has stated that, when executed correctly, advertising can lower the barrier to entry and make gaming more accessible. Mobile gaming has already illustrated how ad‑supported tiers can invite new players without demanding a large upfront purchase. Crucially, the approach remains optional.
Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads, while those who are willing to watch a brief commercial can enjoy the same content at a reduced cost. By offering a two‑tier system, Xbox aims to keep its loyal fan base satisfied while simultaneously attracting newcomers who might otherwise be deterred by high costs. Although there is no concrete survey data on this specific launch yet, it is reasonable to predict that a majority of gamers would tolerate a 30‑second advertisement if it granted them an hour of gameplay on a favorite or new title.
Xbox likely has internal data supporting this assumption. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America demonstrates that in‑game advertising consistently outperforms television, social media, and other online formats 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.
Moreover, Xbox’s “around‑the‑game” strategy—showing ads before the game begins rather than embedded within the gameplay—appears to provide an additional boost in recall and attribution when compared with traditional in‑game placements. Why does this matter? While we can often recall ads seen on TV or scrolling through feeds, we do not always link those impressions to the correct brand.
Gaming seems to occupy a unique space where ad recall translates more directly into brand association, which explains why companies like Xbox and EA are increasingly exploring ad‑based models. It is important to note that Xbox’s ads are positioned pre‑game, not during the gameplay itself. In‑game ad formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and likeability.
A hybrid approach that combines pre‑game and in‑game ads could theoretically offer advertisers the best of both worlds, but it also risks provoking greater pushback from players who value an uninterrupted experience. Xbox has emphasized that the advertisements will be non‑intrusive. By placing ads before the game launches, they avoid breaking the immersive flow that gamers cherish. This consideration benefits both the player—who retains a seamless experience—and the advertiser, who wants their message to be part of the experience rather than a disruptive interruption.
Relevance will be key. No gamer wants to see a cat‑food commercial when they don’t own a cat, or an ad for a game they have already completed.
Contextual, well‑targeted ads that make sense in the gaming environment will keep players from abandoning the session and will 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 pre‑game advertisements; 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 a bold, risk‑taking attitude 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 gaming ad campaigns have relied on “watch an ad, get an extra life” mechanics. Xbox’s proposal is different: it asks players to watch an ad to access a game they already own.
Our existing data does not yet indicate how this will be received. However, broader research on ad‑format perception shows that descriptors such as “non‑intrusive” and “immersive” are frequently associated with positive player sentiment. 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 within games has existed for years, but rarely 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.