Virginie Chesnais serves as chief marketing officer at Happydemics, an ad‑tech analytics firm. For many years, gamers have looked at in‑game advertising with suspicion, and their concerns are not unfounded.
The reputation of ads in interactive entertainment is mixed, with frequent complaints about redirects to unrelated sites or apps, misleading content, and hard‑to‑find close buttons that frustrate users. A recent study conducted by eMarketer highlighted that 52 percent of players would abandon a session if they encountered multiple intrusive ad elements.
Losing half of an audience at the moment you are trying to engage them is hardly an effective approach. However, advertisements do not have to be a negative experience. The same research indicated that one in five gamers would actually increase the frequency with which they played 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 welcoming niche within the medium. The argument for introducing an advertising‑based revenue model in games is more compelling than many assume, especially when we look at the success of linear media platforms. Services such as Netflix, Disney+, and other streaming giants have demonstrated that a stable subscription offering can coexist profitably with an ad‑supported tier. Should Xbox’s experiment prove viable, it would not only preserve its paying subscriber base but also unlock a fresh, previously untapped source of income at a moment when the company could benefit from additional cash flow.
This development matters because console gaming is increasingly positioning itself as a premium product. Prices for games, consoles, accessories, and downloadable content continue to rise, making it harder for the average consumer to justify the expense and creating a barrier to entry for casual gamers.
Xbox itself has stated that, when executed correctly, advertising can help lower the cost of accessing games. Mobile gaming already illustrates how ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases. Crucially, the model remains optional. Players who prefer an ad‑free experience can continue to do so by paying a subscription fee.
By offering a two‑tier system, Xbox hopes to keep its loyal fan base while simultaneously opening the door to newcomers who might otherwise be priced out. Although there is no concrete survey data on this specific rollout yet, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second commercial if it granted them an hour of playtime on a favorite or brand‑new title. Xbox likely has internal data supporting this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that in‑game advertisements consistently outperform television, social media, and other online formats in terms of recall and attribution.
Players are more likely to remember an ad they saw while gaming and to correctly associate it with the sponsoring brand. Xbox’s “around‑the‑game” approach—showing ads before the game starts rather than embedding them within the gameplay—adds another layer of interest.
Our data indicate that these pre‑game placements achieve higher recall and attribution scores compared with intrinsic in‑game placements. This distinction matters because, while we may notice ads on TV or social feeds, we do not always link them to the associated brand. Gaming appears to operate in a league of its own on this metric, which likely explains why companies such as Xbox and EA are increasingly exploring ad‑based models. It is important to note that Xbox’s ads are not in‑game but pre‑game.
Traditional in‑game formats tend to excel further down the marketing funnel, delivering stronger lifts in brand image, consideration, interest, and likability. A hybrid strategy that combines both pre‑game and in‑game ads could offer advertisers the best of both worlds, though it might also provoke greater pushback from players. Xbox has promised that the advertisements will be non‑intrusive.
By placing ads before gameplay begins, the company aims to preserve the immersive experience once the player is inside the game. This consideration benefits both gamers, who avoid interruptions, and advertisers, who want their messages to be part of a positive experience rather than a disruptive one.
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 can keep players from abandoning the session while giving brands an effective platform to reach new audiences.
Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how gamers will react to pre‑game advertising, and the second is whether the revenue generated will be sufficient to sustain the model long‑term.
The move toward ad‑supported game streaming reflects a bold strategy by Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment. Only time will reveal whether this gamble pays off. Historically, many gaming ad models have relied on a "watch an ad, earn an extra life" mechanic.
Xbox’s proposal asks players to watch an ad simply to access a game they already own—a different trade‑off that our existing data cannot fully predict. However, broader research on ad format perception shows that descriptors such as "non‑intrusive" and "immersive" rank highly among positive responses.
If Xbox and future adopters aim to succeed, these two attributes will be critical metrics to monitor. My forecast is that Xbox will neither be the first nor the last platform to trial this approach.
Advertising in games has existed for years, but often without the player’s experience as a primary focus. Should Xbox manage to integrate ads in a way that feels seamless and optional, it could pave the way for similar initiatives across the industry and make video games far more accessible to everyday gamers.