Virginie Chesnais serves as Chief Marketing Officer at Happydemics, an ad‑tech analytics firm. For many years, gamers have approached in‑game advertising with suspicion, and that wariness is not unfounded. The reputation of ads in video games is mixed; players often encounter redirects to unrelated sites, misleading content, or poorly designed close buttons that are hard to find, leading to frustration. A recent study by eMarketer highlighted that 52 % of gamers would stop playing if they ran into multiple disruptive advertising elements.
Losing half of your audience at the moment you are trying to engage them is hardly an effective tactic. However, advertising does not have to be a negative experience. The same research indicated that one in five gamers would actually increase the frequency with which they played 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 gaming continuing to climb, well‑crafted advertisements could find a receptive home in the console ecosystem.
The argument for introducing an "ads‑for‑games" model is more compelling than many assume, and it has already been validated to some degree by the success of linear media platforms. Services such as Netflix, Disney+, and other streaming giants have demonstrated that offering both ad‑free and ad‑supported tiers can generate significant revenue while retaining a broad subscriber base. Should Xbox’s experiment succeed, it would not only preserve its paying customers 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 positioned as a premium offering. Prices for games, consoles, accessories, and downloadable content (DLC) keep rising, creating a financial barrier for the average player. Xbox itself has acknowledged that, when executed properly, advertising can help lower the cost of entry to gaming.
The mobile gaming sector has already shown that ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases, allowing them to enjoy games in exchange for watching short ads. Importantly, any advertising model Xbox introduces would be optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads, while those who are more price‑sensitive could opt into the ad‑supported tier.
By offering a two‑tier system, Xbox aims to keep its loyal fan base satisfied while simultaneously making games more accessible to newcomers. Although there is no concrete survey data on this specific announcement 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 gameplay on a beloved or new title. Xbox likely has internal data supporting this hypothesis.
Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America reveals that in‑game ads consistently outperform traditional TV, social, and online placements in terms of ad recall and attribution. In other words, players are more likely to remember an ad they see while gaming and correctly associate it with the brand that served it. This advantage becomes even more pronounced when ads are placed "around the game"—for example, before the gameplay begins—rather than embedded directly within the game world. Our data show that these pre‑game formats achieve higher recall and attribution scores compared to intrinsic in‑game placements.
The distinction matters because, while we may remember ads that appear on television or in social feeds, that memory does not always translate into brand recognition. Gaming appears to be in a league of its own regarding this metric, which likely explains why companies like Xbox and EA are increasingly exploring ad‑based gaming models.
It is crucial to note that Xbox’s planned ads would not interrupt the gameplay itself; they would appear before the game starts. In‑game ad formats, on the other hand, tend to excel further down the funnel, delivering stronger lifts in brand image, consideration, interest, and ad likeability.
A hybrid approach—combining pre‑game and in‑game ads—could offer advertisers the best of both worlds, though it might also provoke greater resistance from players who dislike any form of advertising. Xbox has pledged that its ads will be non‑intrusive, a promise that makes sense when ads are shown prior to the gaming session. By keeping the advertisements outside the immersive experience, Xbox protects both the player’s enjoyment and the advertiser’s desire for a seamless, context‑rich environment.
Relevance will be another key factor. Nobody wants to see an advertisement for cat food if they don’t own a cat, or for a game they have already completed. By delivering contextual, targeted ads that align with a player’s interests, Xbox can minimize the risk of users abandoning the session while providing brands with an effective platform to reach new audiences.
Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how gamers 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 shown a willingness to experiment and take calculated risks.
Only time will reveal whether this strategy delivers the intended results. Historically, many gaming ad campaigns have relied on a "watch an ad, get an extra life" mechanic.
Xbox’s proposal differs: players would watch an ad to access a game they already own, rather than receiving a direct in‑game reward. Our existing data set does not yet indicate how this approach will be received. However, broader research on ad format perception shows that when respondents recall an ad, they frequently describe the experience as "non‑intrusive" and "immersive"—the two most popular positive descriptors.
If Xbox and future adopters wish to make advertising a lasting component of gaming, they will need to focus closely on these attributes. In my view, Xbox will neither be the first nor the last platform to test such a model.
Advertising in video games is not new, but it has rarely been implemented with the player’s experience at the forefront. Should Xbox manage to strike the right balance, it could pave the way for other gaming companies to follow, ultimately making video games more affordable and accessible for everyday players.