Virginie Chesnais serves as chief marketing officer at Happydemics, an analytics platform that focuses on advertising technology. For many years, gamers have approached in‑game advertising with suspicion, and their concerns are not unfounded. The reputation of ads in video games is mixed: users often encounter redirects to unrelated websites or apps, misleading content, or close buttons that are difficult to locate, all of which generate frustration.
A recent study conducted by eMarketer highlighted that 52 % of players would abandon a title after encountering several intrusive ad elements. Losing half of an audience at the very moment you are trying to engage them is hardly an effective tactic. However, advertising does not have to be a negative experience.
The same research indicated that one in five gamers would actually increase the frequency with which they play a game if the in‑game advertisements were of high quality and relevance. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming climbing steadily, there is a genuine opportunity for well‑crafted ads to find a comfortable niche within the gaming ecosystem. The argument for a hybrid "ads‑for‑games" model is more compelling than many realize, especially when we look at the success of linear media platforms.
Services such as Netflix, Disney+, and other on‑demand streaming providers have demonstrated that offering both subscription‑only and ad‑supported tiers can generate substantial revenue while keeping a broad audience base. Should Xbox’s experiment succeed, it could preserve its existing paying subscribers and simultaneously unlock a previously untapped source of income at a moment when the brand is seeking fresh cash flows.
The relevance of this development is underscored by the fact that console gaming is increasingly positioned as a premium product. Prices for titles, consoles, accessories, and downloadable content continue to rise, creating a financial barrier for the average player.
Xbox itself has stated that, when executed correctly, advertising can lower the cost of entry for gamers. The mobile‑gaming sector already provides evidence that ad‑supported options can give newcomers a way to experience games without the need for a large upfront payment. Crucially, any advertising model Xbox adopts would be optional.
Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads, while those willing to tolerate short commercial breaks could enjoy a reduced cost of access. By offering a two‑tier system, Xbox aims to retain its loyal fan base while simultaneously broadening its reach to new users who might otherwise be priced out. Although no specific survey data on Xbox’s latest announcement is available yet, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second advertisement if it meant gaining an hour of gameplay with a beloved or new title.
Xbox’s internal data 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 when it comes to recall and attribution. Players are more likely to remember an ad they saw while playing and correctly associate it with the brand that displayed it. This advantage becomes even more pronounced with "around‑the‑game" placements—ads shown before a session begins rather than embedded within the gameplay.
Our data indicate that such pre‑game formats generate higher recall and attribution scores compared with intrinsic in‑game placements. The distinction matters because, while we may recall a commercial seen on TV or a banner on a social feed, that recollection does not always translate into a clear brand connection.
Gaming appears to occupy a unique position in this respect, which likely explains why companies like Xbox and EA are exploring ad‑based monetisation strategies more aggressively. It is important to note that Xbox’s plan focuses on pre‑game ads rather than intrusive in‑game interruptions. In‑game ad formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and overall likability. A combined approach—leveraging both pre‑game and in‑game ads—could theoretically offer advertisers the best of both worlds, though it also risks provoking greater pushback from the player community.
Xbox has pledged that any advertisements will be non‑intrusive. By placing ads before the game starts, the company aims to preserve the immersive experience once gameplay begins. This approach benefits both players, who are spared from mid‑session disruptions, and advertisers, who want their messages to be part of a seamless experience rather than a jarring interruption. Relevance will be key.
Nobody enjoys seeing a commercial for cat food when they do not own a cat, or an advertisement for a game they have already completed. By ensuring that ads are contextually appropriate and tailored to the individual player, Xbox can minimise the risk of users abandoning the session at the sight of an irrelevant spot, while simultaneously offering brands a highly targeted platform to reach new audiences. Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to the presence of ads, and the second is whether the revenue generated will justify making the model a permanent fixture.
The decision to explore ad‑supported 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 of our gaming‑ad projects have relied on a "watch an ad, earn an extra life" model. Xbox, however, is proposing that players watch an advertisement simply to access a game they already own. Our current dataset does not contain direct evidence of how this will be received, but broader research on ad‑format perception indicates that descriptors such as "non‑intrusive" and "immersive" consistently rank highly among positive responses.
If Xbox and future adopters aim to make advertising a lasting component of gaming, these two attributes will be essential to monitor. In my view, Xbox will neither be the first nor the last platform to test this kind of approach.
Advertising has been part of gaming 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 other companies to follow suit, ultimately making video games more affordable and accessible for everyday gamers.