Virginie Chesnais serves as the chief marketing officer at Happydemics, an analytics platform that focuses on advertising technology. For many years, gamers have approached in‑game advertising with suspicion, and that wariness is understandable. The reputation of ads within video games is mixed at best; players often encounter redirects to unrelated websites or apps, misleading content, or dismissive close buttons that are difficult to locate, all of which generate frustration. A recent study conducted by eMarketer highlighted that 52 % of gamers would abandon a session if they ran into several intrusive 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 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 gaming continuing to climb, well‑crafted advertisements could find a welcoming niche within the medium.
The rationale for introducing a gaming‑focused ad model is more compelling than many anticipate, and it has already been partially validated by linear media platforms. Services such as Netflix, Disney+, and other streaming giants have demonstrated that a steady revenue stream can be generated by offering both ad‑free and ad‑supported subscription tiers. Should Xbox’s experiment succeed, it would not only preserve its paying subscriber base but also unlock an entirely new revenue channel at a moment when the company could benefit from additional cash flow.
This development matters because console gaming is increasingly positioned as a premium offering. Prices for games, consoles, accessories, and downloadable content keep rising, making it harder for the average consumer to justify the expense.
Xbox itself has acknowledged that, when executed correctly, advertising can lower the barrier to entry for gamers. The mobile gaming sector already provides a clear illustration: ad‑supported tiers allow players to engage with games without the need for large upfront purchases, thereby widening the audience. Crucially, the proposed model remains optional.
Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads. By delivering a two‑tier system—one ad‑free, one ad‑supported—Xbox hopes to keep its loyal fan base while simultaneously attracting newcomers who might otherwise be deterred by cost. Although no formal survey data on Xbox’s new approach has been released yet, it is reasonable to assume that the majority of gamers would tolerate a 30‑second commercial if it meant gaining access to a favorite title or trying out a brand‑new game for an hour.
Xbox likely has internal data supporting this hypothesis. Happydemics’ analysis of 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 playing and correctly associate it with the brand behind it.
This advantage becomes even more pronounced when ads are placed “around‑the‑game,” meaning they appear before the gameplay begins rather than embedded within the game world. Our data indicate that these pre‑game placements achieve higher recall and attribution scores compared with intrinsic in‑game placements. Why does this matter? While consumers can often recall ads they encounter on TV or while scrolling through feeds, those memories do not always translate into a clear brand connection.
Gaming appears to operate in a different league: the immersive nature of the medium seems to enhance both recall and brand linkage, which likely explains why companies like Xbox and EA are increasingly exploring ad‑based models. It is essential to note that Xbox’s ads will not be woven into the gameplay itself; they will be shown prior to the start of a session.
In‑game ad formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and overall likability. A hybrid approach—combining pre‑game and in‑game ads—could theoretically offer advertisers the best of both worlds, yet it also risks provoking greater pushback from players who are sensitive to interruptions. Xbox has promised that any advertising will be non‑intrusive. By placing ads before the game launches, the company aims to preserve the immersive experience once play begins.
This approach benefits both gamers, who won’t have their flow disrupted, and advertisers, who want their messages to be part of a positive experience rather than a nuisance. Relevance will be another key factor. Nobody enjoys being served a cat‑food commercial when they don’t own a cat, or an advertisement for a game they have already completed.
By ensuring that ads are contextually appropriate and provide a clear rationale for their appearance, Xbox can keep players from abandoning the session while giving brands a highly effective platform to reach fresh audiences. Nevertheless, Xbox is navigating largely uncharted waters.
The first uncertainty lies in how players will react to this new ad model; the second concerns whether the revenue generated will be sufficient to sustain the approach over the long term. The move toward ad‑supported streaming reflects a bold strategy by Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment and take calculated risks.
Only time will reveal whether this gamble pays off. Historically, many of our gaming‑ad initiatives have relied on a “watch an ad, earn an extra life” premise. Xbox, by contrast, is asking players to watch an ad simply to access a game they already own.
Our existing data set 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 among the most positively received.
If Xbox—and potentially other platforms in the future—aim to make advertising a staple of the gaming experience, these two metrics will be crucial to monitor. My forecast is that Xbox will neither be the first nor the last company to trial this type of model. Advertising within games has existed for many years, but it has rarely been designed with the player’s experience at its core.
Should Xbox succeed in delivering ads that feel seamless and valuable, it could pave the way for other publishers to follow suit, ultimately making video games more affordable and accessible for the everyday gamer.