Virginie Chesnais serves as the chief marketing officer at Happydemics, an analytics platform that focuses on advertising technology. For many years, gamers have looked at in‑game advertising with suspicion, and that wariness is understandable. The reputation of ads in video games is mixed at best, as players often encounter redirects to unrelated websites or apps, misleading content, or close buttons that are difficult to locate—issues that quickly become sources of frustration. A recent study conducted by eMarketer highlighted that 52 % of gamers would abandon a session if they ran into several disruptive ad elements.
Losing half of your audience at the moment you are trying to engage them is hardly a winning tactic. However, advertising does not have to be a negative experience.
The same research revealed that one in five gamers would actually play a title more often if the in‑game advertisements were of high quality and felt appropriate. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of playing games continuing to climb, well‑crafted ads could find a receptive home within the gaming ecosystem.
The argument for introducing a modest ad‑for‑games model is more compelling than many anticipate, especially when we look at the success of linear media. Services such as Netflix, Disney+, and other streaming platforms have demonstrated that offering an ad‑supported tier alongside a premium subscription can generate substantial revenue while expanding the audience base. If Xbox’s experiment proves viable, it could not only preserve its paying subscriber base but also unlock a completely new, previously untapped revenue stream—something the brand could greatly benefit from at this stage.
The relevance of this shift is underscored by the fact that console gaming is increasingly positioned as a premium product. Prices for games, consoles, accessories, and downloadable content keep rising, making it harder for the average consumer to justify the expense.
This creates a barrier that discourages many potential players from entering the market. Xbox itself has stated that, when executed correctly, advertising can lower the cost of accessing games. Mobile gaming has already shown that ad‑supported tiers can provide an entry point for players who are unwilling or unable to make a large upfront purchase. Crucially, any ad‑based model would be optional.
Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those who are comfortable with occasional ads could enjoy a reduced‑price option. By offering a two‑tier system, Xbox hopes to keep its loyal fan base intact while simultaneously making games more affordable for newcomers.
Although there is currently no specific survey data on this particular announcement, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second commercial if it meant they could play a favorite title or a new release for an hour without paying extra. Xbox likely has internal data that supports this hypothesis. Happydemics analyzed 285 in‑game advertising campaigns across the United Kingdom and North America and found that in‑game ads consistently outperformed television, social media, and other online formats in terms of recall and attribution.
In other words, players are more likely to remember an ad they saw while gaming and correctly associate it with the brand that displayed it. This advantage becomes even more pronounced with "around‑the‑game" placements—ads that appear before the gameplay starts rather than embedded 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 may recall ads seen on TV or scrolling through a feed, that memory does not always translate into a clear brand connection.
Gaming appears to operate in a different league when it comes to linking ad exposure to brand awareness, which explains why companies like Xbox and EA are increasingly exploring ad‑based gaming models. It is important to note that Xbox’s plan focuses on pre‑game ads, not intrusive in‑game interruptions. In‑game formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and overall likability. A hybrid approach that combines both pre‑game and in‑game ads could theoretically provide advertisers with the best of both worlds, but it also risks provoking greater pushback from players who are sensitive to any form of interruption.
Xbox has emphasized that the advertisements will be non‑intrusive. By placing ads before the game begins, the company aims to preserve the immersive experience once the player is actually inside the virtual world. This approach benefits both gamers—who avoid disruption during gameplay—and advertisers, who want their messages to be part of a seamless experience rather than a jarring interruption. Relevance will be key.
No gamer wants to see a promotion for cat food when they don’t own a cat, or an ad for a game they have already completed. Contextual, well‑targeted ads that make sense for the individual player will be essential to prevent users from abandoning the session at the first sign of an irrelevant commercial. When executed thoughtfully, ads can become a valuable platform for brands to reach new audiences without alienating the core gaming community. 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 decision to explore ad‑supported game streaming reflects a bold, risk‑taking attitude from Xbox CEO Asha Sharma, who appears willing to experiment with innovative monetisation strategies. Only time will reveal whether this gamble pays off. Historically, many gaming ad campaigns have relied on a "watch an ad, earn an extra life" model.
Xbox’s proposal differs: players would watch an ad to access a game they already own, rather than to receive a bonus. Our existing data set does not yet indicate how this specific exchange will be received.
Research on ad format perception shows that when respondents are asked to describe ads they remember, terms such as "non‑intrusive" and "immersive" rank among the most positive descriptors. If Xbox and future industry peers aim to make advertising a lasting part of the gaming experience, 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 such a strategy. Advertising has been part of gaming for years, but it has rarely been designed with the player’s experience as the primary focus.
Should Xbox succeed in balancing revenue generation with a respectful, player‑centric ad experience, it could pave the way for other companies to follow suit, ultimately making video games more accessible to everyday gamers worldwide.