Virginie Chesnais serves as chief marketing officer at the ad‑technology analytics firm Happydemics. 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: users often encounter redirects to unfamiliar websites or apps, deceptive messaging, or hide‑away close buttons that are difficult to locate, all of which generate frustration. A recent study conducted by eMarketer revealed that 52 % of players would abandon a title if they ran into several intrusive ad elements.
Losing half of your audience at the moment you are trying to engage them is hardly a winning formula. Nevertheless, advertisements do not have to be a negative experience. The same research indicated that one in five gamers would actually play a game more often if the ads displayed were of high quality and relevance. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming steadily climbing, premium‑grade ads could find a welcoming niche within the industry.
The argument for a hybrid "ads‑for‑games" model is more compelling than many assume, a notion already validated to some degree by linear media. Services such as Netflix, Disney+ and other streaming platforms have demonstrated that offering both ad‑free and ad‑supported tiers can generate substantial revenue while keeping a broad subscriber base. Should Xbox’s experiment succeed, it would not only preserve existing paying members but also unlock a previously untapped revenue stream at a moment when the brand is eager for fresh income. This development matters because console gaming is increasingly positioned as a premium offering.
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 for casual players. Xbox itself has stated that, when executed correctly, advertising can lower the cost of entry to gaming.
Mobile gaming already shows that ad‑supported tiers can give players a way into the ecosystem without demanding a large upfront payment. Crucially, the approach remains optional.
Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads. By providing a two‑tier system, Xbox hopes to keep its loyal fanbase while simultaneously widening accessibility for newcomers.
Although no concrete survey data on this specific rollout is available yet, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second commercial if it meant gaining an hour of playtime on a favorite or brand‑new title. Xbox’s own analytics are likely to confirm that hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that in‑game advertising consistently outperforms television, social media and standard online ads 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. This is where Xbox’s "around‑the‑game" strategy—advertisements that appear before the gameplay begins rather than embedded within the game world—becomes intriguing. Our data indicate that pre‑game formats enjoy a clear advantage in recall and attribution compared with intrinsic in‑game placements. The distinction matters because while we may recall an ad seen on TV or scrolling through a feed, that memory does not always translate into a clear brand link.
Gaming appears to sit 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 essential to note that Xbox’s ads are not woven into the gameplay itself; they are shown beforehand.
Traditional in‑game formats tend to excel further down the funnel, delivering stronger lifts in brand image, consideration, interest and likability. A combined approach—leveraging both pre‑game and in‑game ads—could offer advertisers the best of both worlds, though it also risks heightened pushback from players. Xbox has pledged that the ads will be non‑intrusive, a promise that is easy to understand. By placing commercials before the game launches, the immersive experience remains untouched.
This is important not only for gamers but also for advertisers, who want their messages to complement rather than disrupt the user journey. Relevance will be key. Nobody wants to see an advertisement for cat food when they don’t own a cat, or for a game they have already completed.
By delivering contextual, purposeful ads, Xbox can keep players from abandoning the session while giving brands a high‑impact platform to reach fresh audiences. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how players will react to pre‑game advertising; 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 move by Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment and take calculated risks.
Only time will reveal whether the strategy delivers the intended results. Historically, our work in gaming advertising has often revolved around "watch an ad, earn an extra life"‑type incentives.
Xbox’s proposal, however, asks players to watch an ad simply to access a game they already own. Our existing data set does not yet show how this will be received. Related research on ad‑format perception—asking participants who recall an ad to describe it using positive adjectives—has highlighted "non‑intrusive" and "immersive" as the most frequent descriptors. If Xbox and future adopters aim to make gaming ads successful, these two attributes will be critical metrics to monitor.
My forecast is that Xbox will neither be the first nor the last to test such a model. Advertising has been part of gaming for years, but it has rarely been designed with the player’s experience at the forefront. Should Xbox manage to strike the right balance, it could pave the way for other developers and publishers to follow, ultimately making video games more affordable and accessible for everyday gamers.