Virginie Chesnais serves as the chief marketing officer at Happydemics, an analytics platform focused on advertising technology. For many years, gamers have been skeptical of advertisements embedded within games, and that distrust is not unfounded.
The reputation of in‑game ads is mixed at best, with common complaints ranging from redirects to unrelated websites or apps, misleading content, and the frustration of trying to locate a close button that seems deliberately hidden. A recent study conducted by eMarketer revealed that 52 % of players would abandon a game if they encountered multiple intrusive ad elements. Losing half of an audience at the very moment you are trying to engage them is hardly an effective strategy.
However, advertisements do not have to be synonymous with annoyance. The same research indicated 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. This insight arrives at a time when Xbox is experimenting with a new ad‑supported game‑streaming service, and the overall expense of gaming continues to climb.
High‑caliber advertising could therefore find a welcoming niche within the gaming ecosystem. The argument for integrating a form of "ads‑for‑games" model is more compelling than many anticipate, especially when we look at 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 substantial revenue while expanding the audience base.
Should Xbox’s model prove viable, it would not only preserve its existing subscription revenue but also unlock a fresh, previously untapped source of income—something the brand could certainly use at this stage. The relevance of this development is heightened by the fact that console gaming is increasingly being positioned as a premium offering.
Prices for games, consoles, accessories, and downloadable content have risen to levels that many casual players find difficult to justify, erecting a financial barrier that limits participation. Xbox itself has stated that, when executed correctly, advertising can reduce the cost of entry for gamers. The mobile gaming sector already provides evidence that ad‑supported tiers can serve as an entry point for players who are reluctant to make large upfront purchases.
Crucially, the proposed system would be entirely optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads, while those willing to tolerate a brief commercial break could enjoy a reduced cost of access. By offering a two‑tier structure, Xbox hopes to retain its loyal fan base while simultaneously making games more approachable for newcomers.
Although no specific survey data on Xbox’s new approach has been released, it is reasonable to assume that a large majority of gamers would accept a 30‑second advertisement if it meant they could play a favorite title or a new release for an hour without paying the full price. Xbox likely has internal data that supports this hypothesis. Data from Happydemics, covering 285 in‑game campaigns across the United Kingdom and North America, consistently shows that in‑game advertisements outperform traditional TV, social, and online ads in terms of recall and attribution. Players are more likely to remember an ad they saw while playing and correctly associate it with the sponsoring brand.
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 research indicates that these pre‑game placements generate higher recall and clearer brand attribution compared with intrinsic in‑game slots. The distinction matters because, while we can often recall ads seen on television or scrolling through social media, those memories do not always translate into a clear brand connection. Gaming appears to operate in its own league regarding this metric, which likely explains why companies like Xbox and EA are increasingly exploring ad‑based models.
It is also important to note that Xbox’s ads would be pre‑game, not in‑game. 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—combining pre‑game and in‑game ads—could theoretically offer advertisers the best of both worlds, though it might also provoke greater resistance from players who are sensitive to any form of interruption. Xbox has pledged that the ads will be non‑intrusive.
By delivering commercials before the game starts, the company aims to preserve the immersive experience once gameplay begins. This approach benefits both the player, who avoids disruption during the core experience, and the advertiser, who wants its message to be part of the experience rather than a nuisance.
Relevance will be key. No gamer 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 provide a clear rationale for their placement, Xbox can minimize the risk of players abandoning a session at the sight of an irrelevant commercial, while offering brands a highly effective platform to reach new audiences. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how players will react to this new ad format; 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 a bold, risk‑taking attitude from Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with innovative ideas.
Only time will reveal whether this gamble pays off. Historically, many gaming ad campaigns have been built around "watch an ad, get an extra life" mechanics. Xbox’s proposal is different: it asks players to watch an ad in order to access a game they already own.
Our current data set does not provide a clear answer on how this will be received. However, broader research on ad format perception shows that descriptors such as "non‑intrusive" and "immersive" rank among the most positively received attributes.
If Xbox—and potentially other platforms in the future—aim to make gaming ads successful, these two qualities will need to be closely monitored. In my view, Xbox will not be the first nor the last company to test this kind of strategy. Advertising within games has existed for many years, but it has rarely been implemented with the player's experience as the primary focus. 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.