Virginie Chesnais serves as chief marketing officer at Happydemics, an analytics platform that specializes in advertising technology. For many years, gamers have looked at in‑game advertising with suspicion, and their concerns are not unfounded. The reputation of ads within video games is mixed; players often encounter redirects to unrelated websites or apps, misleading content, or tiny, hard‑to‑find close buttons that frustrate the experience.
A recent study conducted by eMarketer revealed that 52 % of gamers would abandon a session if they ran into several intrusive ad elements. Losing half of the audience at the moment you are trying to engage them is hardly an effective approach. However, advertising does not have to be a negative force. The same research indicated that one in five gamers would actually increase the frequency with which they play a title if the advertisements presented 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 receptive home in the gaming ecosystem. The argument for incorporating a modest advertising component into the gaming model is more compelling than many assume, and it draws on lessons learned from linear media. Platforms such as Netflix, Disney+ and other video‑on‑demand services have demonstrated that a hybrid model—offering both ad‑free subscriptions and cheaper, ad‑supported tiers—can generate substantial revenue while expanding the audience base. Should Xbox’s experiment prove successful, it could preserve its paying subscriber base and simultaneously unlock a fresh, previously untapped source of income at a moment when the brand is seeking additional financial streams.
This issue is significant because console gaming is increasingly being positioned as a premium service. Prices for games, consoles, accessories and downloadable content have risen steadily, making it harder for the average consumer to justify the expense.
In Xbox’s own announcement, the company suggested that, when executed correctly, advertising could lower the barrier to entry for gamers. The mobile gaming sector already offers a clear precedent: ad‑supported tiers allow players to experience games without the need for large upfront purchases, thereby broadening the market. Crucially, the model remains optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads.
By providing a two‑tier system, Xbox hopes to keep its loyal fan base satisfied while also attracting newcomers who might otherwise be deterred by cost. Although there is no specific survey data on this particular rollout yet, it is reasonable to wager that a majority of gamers would tolerate a 30‑second commercial if it granted them an hour of playtime 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 shows that advertisements embedded within games consistently outperform television, social media and other online formats in terms of recall and attribution. In other words, gamers are more likely to remember an ad they saw while playing and correctly associate it with the sponsoring brand.
Xbox’s “around‑the‑game” strategy—placing ads just before the game launches rather than within the gameplay itself—adds another layer of intrigue. Our data indicate that pre‑game placements achieve higher recall and attribution scores compared with ads that appear directly inside the game world. This distinction matters because, 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 appears to occupy a unique niche where ad memory and brand association are especially strong, which may explain why companies like Xbox and EA are increasingly exploring ad‑based revenue models. It is important to note that Xbox’s ads are not integrated into the gameplay; they are displayed before the session begins. Traditional 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 both pre‑game and in‑game ads could theoretically offer advertisers the best of both worlds, but it also risks greater pushback from players who value an uninterrupted experience.
Xbox has emphasized that the ads will be non‑intrusive. By delivering advertisements before the game starts, the company aims to preserve the immersive quality of the actual play session.
This consideration benefits both the player, who avoids disruption, and the advertiser, who wants the campaign to feel like a natural part of the experience rather than an annoyance. Relevance will be another key factor. Nobody wants to see an advertisement for cat food when they don’t own a cat, or for a game they have already completed. By ensuring that ads are contextually appropriate and tied to the player’s interests, Xbox can keep viewers engaged rather than prompting them to quit at the first sign of irrelevant content.
This relevance also maximizes the value for brands seeking to reach new audiences. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how players 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 streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, but only time will reveal whether the strategy delivers the intended results. Historically, many of our gaming‑ad campaigns have revolved around “watch an ad, earn an extra life” mechanics.
Xbox’s proposal, however, asks players to watch an ad simply to access a game they already own. Our existing data set does not yet provide clear guidance on how this will be received. Related research on ad‑format perception shows that when participants are asked to describe ads they remember, terms such as “non‑intrusive” and “immersive” rank among the most positive descriptors. If Xbox and future adopters aim to make advertising a lasting component of gaming, these two attributes will be essential metrics to monitor.
My forecast is that Xbox will neither be the first nor the last platform to experiment with this approach. Advertising has been part of gaming for years, but it has rarely been designed with the player’s experience at the forefront. Should Xbox succeed, it could pave the way for other gaming companies to follow suit, ultimately making video games more affordable and accessible to everyday players.