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 there are good reasons for that wariness.
The reputation of ads in video games is mixed; players often encounter redirects to unrelated websites or apps, misleading content, or tiny close buttons that are hard to locate, all of which generate frustration. A recent study by eMarketer highlighted that 52 % of gamers would abandon a session if they ran into several disruptive ad elements. Losing half of your audience at the very moment you’re trying to engage them is hardly an effective tactic. However, advertising does not have to be a negative experience.
The same survey revealed that one in five gamers would actually increase the frequency with which they play a title if the in‑game advertisements were of high quality and well integrated. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming steadily climbing, premium‑grade ads could find a receptive home within the medium. The argument for a modest ad‑for‑games model is more compelling than many assume, especially when we look at the success of linear media. Platforms such as Netflix, Disney+, and other streaming services have demonstrated that offering an ad‑supported tier can generate significant revenue while still delivering a reliable service.
Should Xbox’s experiment succeed, it would not only preserve its subscription base but also unlock a brand‑new, previously untapped revenue stream—something the company could certainly use at this juncture. This development matters because console gaming is increasingly positioning itself as a premium offering.
The price tags attached to games, consoles, accessories, and downloadable content keep rising, making it harder for the average consumer to justify the expense. In effect, a financial barrier is being erected that keeps casual players on the sidelines.
Xbox itself has stated that, when executed correctly, advertising can help lower the cost of accessing games. The mobile‑gaming sector already provides evidence that ad‑supported tiers can open a pathway for players who are unwilling or unable to make large upfront purchases.
Crucially, the model remains optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads.
By presenting a two‑tier system, Xbox hopes to keep its loyal fan base satisfied while simultaneously making games more approachable for newcomers. Although there is no specific survey data on this particular announcement yet, it is reasonable to wager that the majority of gamers would tolerate a 30‑second commercial if it meant they could play a beloved title—or even a brand‑new game—for an hour. Xbox likely has internal data that supports this intuition. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that in‑game ads consistently outperform television, social media, and other online formats in terms of ad recall and attribution.
In other words, players are more likely to remember an advertisement they saw while gaming and correctly associate it with the sponsoring brand. This is where Xbox’s “around‑the‑game” strategy—ads that appear before the gameplay begins rather than embedded within the game world—becomes intriguing. Our data indicate that these pre‑game placements enjoy a clear advantage in recall and attribution compared with intrinsic in‑game spots.
The distinction matters because, while we can often remember ads that flash on TV or scroll through our feeds, that memory does not always translate into brand linkage. Gaming appears to occupy a unique niche where recall more readily converts into brand association, which likely explains why companies such as Xbox and EA are increasingly exploring ad‑based gaming models. It is important to note that Xbox’s ads are not in‑game; they are pre‑game. Traditional in‑game formats 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 theoretically provide advertisers with the best of both worlds, but it also risks heightened pushback from players who value an uninterrupted experience. Xbox has pledged that the advertisements will be non‑intrusive.
By placing ads before the game loads, the company aims to preserve the immersive quality of the gameplay itself. This consideration benefits both the player, who avoids mid‑session interruptions, and the advertiser, who wants its message to be part of a seamless experience rather than a disruptive nuisance. Relevance will be another key factor. Nobody wants to see a promotion for cat food if they don’t own a cat, or an ad for a game they’ve already completed.
By delivering contextual, well‑targeted ads, Xbox can keep players from abandoning the session while offering brands a highly effective platform to reach fresh audiences. Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how gamers will react to this new advertising format; 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 unconventional strategies.
Whether this gamble pays off remains to be seen. Historically, our work in gaming advertising has focused on “watch an ad, earn an extra life” type incentives.
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 reveal how this trade‑off will be received.
Yet broader research on ad‑format perception suggests that when participants are asked to describe ads they remember, terms like “non‑intrusive” and “immersive” frequently surface as positive descriptors. If Xbox—and potentially other platforms in the future—aim to make gaming ads successful, these two attributes will be critical metrics to monitor. My forecast is that Xbox will neither be the first nor the last to experiment with this approach. Advertising has been part of gaming for many years, but it has rarely been designed 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 the everyday gamer.