Virginie Chesnais serves as the chief marketing officer at Happydemics, a platform that provides analytics for advertising technology. For many years, gamers have approached in‑game advertising with suspicion, and that wariness is understandable. The reputation of ads within games is mixed at best; players often encounter redirects to unrelated websites or apps, misleading content, and dismiss buttons that are hard to locate, all of which breed frustration. A recent study conducted by eMarketer revealed that 52 % of gamers would abandon a title if they ran into several disruptive advertising elements.
Losing half of an audience at the moment you’re trying to engage them is hardly an effective approach. However, advertisements do not have to be a nuisance. The same research indicated that one in five gamers would actually increase the frequency with which they play a game if the in‑game ads were of a high standard. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming steadily climbing, there is a genuine opportunity for well‑crafted ads to find a welcoming home inside the gaming ecosystem.
The concept of offering an "ads‑for‑games" model is more compelling than many assume, especially when we look at the success of linear media. Platforms such as Netflix, Disney+, and other streaming services have demonstrated that a hybrid model—combining a subscription tier with an ad‑supported tier—can generate substantial revenue while expanding the audience base. Should Xbox’s experiment succeed, it would not only preserve its paying subscriber base but also unlock a previously untapped source of income at a moment when the brand could benefit from additional cash flow.
This development matters because console gaming is increasingly positioning itself as a premium experience. Prices for games, consoles, peripherals, and downloadable content have risen to levels that many casual players find hard to justify, creating a financial barrier to entry.
Xbox itself has stated that, when executed correctly, advertising can lower the cost of accessing games. Mobile gaming already offers a precedent: ad‑supported tiers let players engage without the need for large upfront purchases, opening the market to a broader demographic. Crucially, the system Xbox proposes is optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee, while those willing to view ads can enjoy the same content at a reduced price.
By offering a two‑tier structure, Xbox aims to retain its loyal community while simultaneously making games more approachable for newcomers. Although there is no concrete survey data on this specific announcement yet, it is reasonable to predict that most gamers would tolerate a 30‑second advertisement if it meant gaining an hour of gameplay on a favorite or newly released title. Xbox likely has internal data supporting this assumption. Happydemics analyzed 285 in‑game advertising campaigns across the United Kingdom and North America and found that in‑game ads consistently outperformed TV, social, 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 when ads are placed "around the game"—for instance, before the gameplay begins—rather than embedded within the game world.
Our data indicate that these pre‑game placements generate higher recall and attribution scores than intrinsic in‑game placements. Why does this matter? While we can often recall ads we see on television or scrolling through social feeds, those memories do not always translate into brand awareness.
Gaming appears to occupy a unique position where ad exposure more reliably converts into brand recognition, which explains why companies like Xbox and EA are increasingly exploring ad‑based models. It is essential to note that Xbox’s ads will not interrupt the actual gameplay; they will appear before the game starts.
Traditional in‑game formats tend to excel further down the conversion funnel, boosting brand image, consideration, interest, and likability. A hybrid approach—combining pre‑game and in‑game ads—could theoretically offer the best of both worlds for advertisers, though it might also provoke greater pushback from players who value an uninterrupted experience. Xbox has promised that the advertisements will be non‑intrusive. By delivering ads prior to the start of a session, the company aims to preserve the immersive quality of the game itself.
This approach benefits both the player, who enjoys an uninterrupted session, and the advertiser, who wants its message to be part of the experience rather than a disruption. Relevance will be key. Nobody wants to see an advertisement for cat food if they don’t own a cat, or a promotion for a game they have already completed. By ensuring that ads are contextually appropriate and provide a clear rationale for their placement, Xbox 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 seeing ads tied to a service they already pay for, and the second is whether the revenue generated will be sufficient to sustain the model over the long term. The move toward ad‑supported streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who appears willing to experiment with new monetisation strategies. Only time will reveal whether this gamble pays off.
Historically, many gaming ad campaigns have been built around a "watch an ad, earn an extra life" premise. Xbox’s proposal is different: it asks players to watch an ad simply to access a game they already own. Our existing data set does not yet indicate how this will be received. Research on ad format perception shows that when participants recall an ad, they often describe the format as "non‑intrusive" and "immersive," two attributes that rank among the most favorable.
If Xbox—and potentially other platforms in the future—are to make gaming ads a success, these two metrics will need close monitoring. My forecast is that Xbox will neither be the first nor the last company to experiment with this approach. Advertising has existed in games for years, 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 initiatives across the industry, ultimately making video games more affordable and accessible for the everyday gamer.