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 not unfounded. The reputation of ads within video games is mixed at best, with frequent complaints about redirects to unrelated websites or apps, misleading content, and the frustration of tiny or missing close buttons that make it difficult to dismiss the promotion. A recent study conducted by eMarketer highlighted the severity of the problem: 52 % of respondents said they would stop playing a title if they encountered several intrusive ad elements.
Losing half of an audience at the very moment you try to engage them is hardly an effective strategy. However, the same research also revealed a more optimistic scenario – one in five gamers indicated they would actually increase the amount of time they spent with a game if the in‑game advertisements were of high quality and felt relevant. This paradox suggests that advertising does not have to be a nuisance; it can be a value‑adding feature when executed correctly.
Xbox is currently piloting an ad‑supported game‑streaming service at a time when the overall cost of playing is climbing steadily. In such an environment, well‑crafted advertisements could find a receptive home within the gaming ecosystem. The rationale for incorporating an ad‑based model into gaming mirrors the success seen in linear media. Platforms like Netflix, Disney+, and other streaming services have demonstrated that offering a lower‑priced, ad‑supported tier can generate substantial revenue while still retaining paying subscribers who prefer an ad‑free experience.
Should Xbox’s experiment prove profitable, the company would not only safeguard its subscription base but also unlock a brand‑new revenue stream – a development that could be crucial for a brand that is currently seeking fresh sources of income. Console gaming is increasingly being positioned as a premium service.
Prices for new releases, console hardware, accessories, and downloadable content (DLC) continue to rise, creating a financial barrier for many potential players. Xbox itself has acknowledged that, when handled responsibly, advertising can help lower the cost of entry to gaming. The mobile gaming sector already provides evidence that ad‑supported tiers can attract users who might otherwise be deterred by high upfront costs, allowing them to enjoy games for free or at a reduced price in exchange for watching short advertisements.
It is also essential to stress that any ad‑based option would remain optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads entirely.
By offering a dual‑track system—one tier with ads and one without—Xbox aims to keep its loyal fan base satisfied while simultaneously making its library more approachable for newcomers. Although there is currently no published survey data specific to Xbox’s new model, it is reasonable to assume that a large majority of gamers would tolerate a brief, 30‑second commercial if it granted them an hour of gameplay with a favorite title or a brand‑new release. Happydemics’ own data, gathered from 285 in‑game campaigns across the United Kingdom and North America, consistently show that in‑game advertising outperforms television, social media, and other online formats when it comes to ad recall and attribution. In other words, gamers are more likely to remember an advertisement they see while playing and to correctly associate it with the brand that displayed it.
Xbox’s “around‑the‑game” approach—ads that appear before the game starts rather than embedded within the gameplay—adds another layer of intrigue. Our research indicates that these pre‑game placements generate higher recall and attribution scores compared with ads that appear directly inside the game environment. This distinction matters because, while we can often remember ads seen on TV or scrolling through a feed, we do not always link those impressions to the appropriate brand. Gaming appears to be a unique medium where the connection between ad and brand is stronger, which likely explains why companies such as Xbox and Electronic Arts are exploring ad‑based monetisation models.
It is important to note, however, that Xbox’s advertisements are not meant to interrupt the actual gameplay. By placing ads before the game loads, the company hopes to preserve the immersive experience that gamers value.
This strategy benefits both players—who avoid interruptions during play—and advertisers, who gain a captive audience that is primed to receive the message without feeling disrupted. Relevance will be a critical factor for success. Nobody wants to see a promotion for cat food when they do not own a cat, nor do they appreciate ads for games they have already completed.
Contextual, well‑targeted ads that align with a player’s interests and behaviours will be essential to keep users from abandoning the experience at the first sign of an irrelevant commercial. When done correctly, these ads can provide brands with a high‑impact platform to reach new demographics while delivering a seamless experience for gamers. Xbox is venturing into largely uncharted territory.
The first unknown is how the gaming community will react to pre‑game advertisements, and the second is whether the revenue generated will be sufficient to sustain the model over the long term. The initiative reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who appears willing to experiment with new monetisation methods. Only time will reveal whether this gamble pays off. Historically, many gaming ad campaigns have relied on a “watch an ad, earn an extra life” mechanic.
Xbox’s proposal differs: it asks players to watch a short commercial in order to access a game they already own, rather than to earn an in‑game reward. Our dataset does not yet contain enough evidence to predict how this shift will be received, but broader research on ad‑format perception shows that descriptors such as “non‑intrusive” and “immersive” rank highly among positive responses. If Xbox can deliver ads that embody these qualities, it will be well‑positioned to win over both gamers and advertisers.
Looking ahead, I anticipate that Xbox will not be the sole pioneer of this approach. Advertising within video games has existed for years, but it has rarely been implemented with the player’s experience as the primary focus. Should Xbox manage to strike the right balance—delivering relevant, non‑disruptive ads that enhance rather than detract from gameplay—it could set a precedent for other companies and help make video games more financially accessible to the everyday consumer.