Virginie Chesnais serves as the chief marketing officer at Happydemics, a platform that specializes in ad‑tech analytics. For many years, gamers have looked at in‑game advertising with suspicion, and that wariness is not unfounded.
The reputation of ads in interactive entertainment is mixed at best, often marred by redirects to unrelated websites or apps, misleading content, and the occasional missing or hard‑to‑find close button that frustrates users. A recent study conducted by eMarketer highlighted that 52 % of gamers would abandon a session if they encountered several disruptive advertising elements. Losing more than half of an audience the moment you try to engage them is clearly not a sustainable approach. However, advertising does not have to be synonymous with irritation.
The same research revealed that one in five players would actually increase the frequency with which they play a title if the in‑game advertisements were of high quality and relevance. With Xbox currently piloting a new ad‑supported game‑streaming service and the overall cost of gaming steadily climbing, the prospect of well‑crafted ads finding a comfortable niche within the gaming ecosystem becomes more plausible.
The argument for a hybrid "ads‑for‑games" model is stronger than many might assume, especially when we look at the successes of linear media platforms. Services such as Netflix, Disney+, and other streaming giants have demonstrated that a reliable, ad‑free tier can coexist profitably with a lower‑priced, ad‑supported option. Should Xbox’s experiment prove viable, it could not only preserve its subscriber base but also unlock a fresh revenue stream at a moment when the brand is eager for additional income.
The relevance of this development is underscored by the fact that console gaming is increasingly positioning itself as a premium offering. Prices for games, consoles, accessories, and downloadable content (DLC) have risen to levels that many casual players find difficult to justify, effectively erecting a barrier to entry.
Xbox itself has acknowledged that, when executed correctly, advertising can help lower the cost of accessing games. The mobile gaming sector already illustrates how ad‑supported tiers can invite new players without demanding a large upfront payment. Crucially, any advertising model Xbox introduces would be optional.
Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads, while those willing to watch brief commercials could enjoy a reduced cost of access. By offering a two‑tier system, Xbox aims to keep its loyal fan base intact while simultaneously making its library more approachable for newcomers. Although concrete survey data on this specific announcement is not yet available, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second ad if it granted them an hour of gameplay on a favorite or new title.
Xbox’s internal research likely supports this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America reveals that in‑game advertisements 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 and correctly associate a brand with an ad they encountered while gaming. This advantage becomes even more pronounced when ads are placed "around the game"—for example, before the game loads—rather than embedded directly within the gameplay environment. Our data indicate that these pre‑game formats generate higher recall and attribution scores compared with intrinsic in‑game placements. Why does this matter?
While we can often recall ads seen on TV or scrolling through a feed, those memories do not always translate into a clear brand association. Gaming appears to occupy a unique space where ad recall is strongly linked to brand recognition, which likely explains why companies like Xbox and Electronic Arts are exploring ad‑based models more aggressively. It is important to note that Xbox’s ads are intended to appear before the game starts, not during the gameplay itself.
Traditional in‑game ad formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and likeability. A blended strategy that combines pre‑game and in‑game advertisements could theoretically deliver the best of both worlds for marketers, but it also risks provoking greater resistance from players who are sensitive to interruptions. Xbox has emphasized that any ads it introduces will be non‑intrusive. By positioning ads prior to the start of a session, the company hopes to preserve the immersive quality of the gaming experience.
This approach benefits both players—who avoid disruptions during play—and advertisers, who want their messages to be part of a seamless experience rather than an annoyance. Relevance will be a key factor. No gamer wants to see a promotion for cat food when they don’t own a cat, or an advertisement for a game they have already completed.
By delivering contextual, well‑targeted ads, Xbox can keep players engaged rather than prompting them to quit at the first sign of irrelevant content, while simultaneously giving brands a highly effective platform to reach new audiences. Nonetheless, 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 decision to explore ad‑supported streaming reflects a willingness by Xbox CEO Asha Sharma to experiment and take calculated risks.
Only time will reveal whether this gamble pays off. Historically, many of our gaming‑ad initiatives have revolved around "watch an ad, earn 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 existing data set does not yet indicate how this particular trade‑off will be received. However, broader research on ad‑format perception shows that when participants are asked to describe ads they remember positively, terms such as "non‑intrusive" and "immersive" frequently emerge as top descriptors.
If Xbox—and potentially other platforms in the future—are to succeed with gaming ads, these two attributes will be critical metrics to monitor. My forecast is that Xbox will neither be the first nor the last major console manufacturer to test this approach. Advertising has been part of gaming for a long time, but rarely with the player's experience at the forefront. Should Xbox manage to strike the right balance, it could pave the way for similar strategies across the industry, ultimately making video games more affordable and accessible for everyday players.