Virginie Chesnais serves as the chief marketing officer at Happydemics, an ad‑technology analytics firm. For many years, gamers have been skeptical of advertisements that appear within games, and their concerns are not unfounded. In‑game ads have earned a mixed reputation, often because they redirect users to external sites or apps, present misleading content, or feature hard‑to‑find close buttons that frustrate players. A recent study conducted by eMarketer revealed that 52 % of gamers would abandon a session if they encountered several disruptive ad elements.
Losing half of an audience at the very moment you are trying to engage them is clearly a poor tactic. However, advertisements do not have to be detrimental. 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. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming steadily climbing, well‑crafted ads could find a receptive home in the console ecosystem.
The argument for introducing an "ads‑for‑games" model is more compelling than it might first appear, especially when we look at the success of linear media platforms. Services such as Netflix, Disney+, and other streaming giants have demonstrated that offering an ad‑supported tier can generate significant revenue while still delivering a consistent user experience. Should Xbox’s experiment prove effective, the company would not only preserve its subscription‑based revenue but also unlock a fresh, previously untapped income stream at a moment when additional cash flow is sorely needed.
This development matters because console gaming is increasingly being positioned as a premium product. The price tags attached to new games, consoles, accessories, and downloadable content (DLC) are rising, making it harder for the average consumer to justify the expense. In Xbox’s own announcement, the company noted that, when executed correctly, advertising can lower the barrier to entry for gamers.
Mobile gaming has already shown that ad‑supported tiers can provide a gateway for players who are unwilling or unable to pay large upfront fees, allowing them to experience games for free or at a reduced cost in exchange for watching ads. Importantly, any ad model Xbox introduces would be optional. Players who prefer an uninterrupted experience could simply subscribe to a paid tier, while those who are comfortable with occasional advertising could enjoy the same games at a lower price point.
By offering a two‑tier system, Xbox hopes to retain its loyal fan base while simultaneously making its library more accessible to newcomers. Although concrete survey data on this specific rollout are not yet available, it is reasonable to assume that a large majority of gamers would tolerate a brief, 30‑second commercial if it meant gaining access to a beloved title or a brand‑new game for an hour. Xbox likely has internal data supporting this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America demonstrates that in‑game advertisements consistently outperform television, social media, and other online formats in terms of recall and attribution.
Players tend to remember and correctly associate these ads with the brands that served them. This advantage becomes even more pronounced when ads are placed "around‑the‑game"—for example, shown before the gameplay begins—rather than embedded directly within the game world.
Our data indicate that these pre‑game formats achieve higher recall and attribution scores than intrinsic in‑game placements. The distinction matters because, while we can often recall ads seen on TV or while scrolling through feeds, we do not always link those impressions to the correct brand.
Gaming appears to operate in a league of its own regarding this metric, which likely explains why companies like Xbox and EA are increasingly exploring ad‑based gaming models. It is crucial to note that Xbox’s plan focuses on pre‑game advertising, not intrusive in‑game pop‑ups. Traditional in‑game ad formats tend to excel further down the marketing funnel, delivering stronger lifts in brand image, consideration, interest, and likability. A hybrid approach—combining both pre‑game and in‑game ads—could provide advertisers with the best of both worlds, though it also risks greater pushback from players who are sensitive to interruptions.
Xbox has pledged that its ads will not be intrusive. By delivering advertisements before the game starts, the company aims to preserve the immersive experience that gamers cherish. This approach benefits both players, who enjoy uninterrupted gameplay, and advertisers, who want their messages to be part of the experience rather than a disruptive annoyance. Relevance will be key.
No player wants to see an ad for cat food when they don’t own a cat, or a promotion for a game they have already completed. Contextual, well‑targeted ads that make sense in the moment will help keep players engaged and prevent them from abandoning the session at the sight of an irrelevant commercial. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how gamers will react to a pre‑game ad model; the second is whether the revenue generated will be sufficient to sustain the initiative over the long term. The move to explore ad‑supported game streaming reflects the boldness of Xbox CEO Asha Sharma, who has shown a willingness to experiment and take calculated risks.
Only time will reveal whether this strategy pays off. Historically, many gaming ad campaigns have relied on "watch an ad, earn an extra life" mechanics.
Xbox’s proposal differs: players would watch an ad to access a game they already own, rather than to gain a bonus. Our existing data set does not yet indicate how this will be received.
Research on ad‑format perception—where respondents who remember an ad are asked to describe the format—has consistently highlighted "non‑intrusive" and "immersive" as the most valued attributes. If Xbox and future adopters aim to make advertising a lasting component of gaming, these two qualities will need to remain front‑and‑center. My forecast is that Xbox will neither be the first nor the last platform to experiment with this model.
Advertising in games has existed for years, but it has rarely been designed with the player’s experience as the primary focus. Should Xbox succeed in delivering a seamless, optional ad experience, it could pave the way for other companies to follow suit, ultimately making video games more affordable and accessible for the everyday gamer.