Virginie Chesnais serves as the chief marketing officer at Happydemics, a platform that specializes in ad‑tech analytics. For many years, gamers have approached in‑game advertising with suspicion, and that wariness is not unfounded. The reputation of ads in video games is mixed at best—players often encounter redirects to unrelated sites or apps, misleading content, or dismissible close buttons that are difficult to locate, all of which fuel frustration. A recent study by eMarketer highlighted that 52 % of gamers would abandon a session if they ran into multiple intrusive ad elements.
Losing half of your audience the moment you try to engage them is hardly a winning formula. However, advertising does not have to be synonymous with annoyance.
The same research revealed that one in five gamers would actually increase the frequency with which they play a title if the in‑game advertisements were of high quality and relevance. With Xbox currently piloting an ad‑supported game‑streaming service amid a backdrop of rising costs for playing, the prospect of well‑crafted ads finding a comfortable niche in gaming becomes increasingly plausible.
The argument for a hybrid "ads‑for‑games" model is more compelling than many anticipate, and it draws support from the broader world of linear media. Services such as Netflix, Disney+, and other streaming platforms have demonstrated that offering a tier with advertisements can generate a steady revenue stream while still delivering a reliable service.
Should Xbox’s experiment succeed, it could not only preserve its existing subscriber base but also unlock a previously untapped source of income at a moment when the brand is eager for fresh cash flow. This development matters because console gaming is steadily evolving into a premium offering. Prices for games, consoles, accessories, and downloadable content keep climbing, creating a financial barrier for the average player. Xbox itself has acknowledged that, when executed correctly, advertising can lower the cost of entry to gaming.
The mobile gaming sector already provides a proof point: ad‑supported tiers enable players to engage with games without paying large upfront fees, opening the market to a broader audience. Crucially, the model remains optional. Players who prefer an ad‑free experience can continue to do so by paying a subscription fee.
By presenting a two‑tier system, Xbox hopes to keep its loyal fanbase satisfied while simultaneously making games more accessible to newcomers. Although there is no specific survey data on this particular announcement 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 gameplay on a favorite or 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 TV, social, and online ads 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.
Xbox’s "around‑the‑game" approach—advertisements that appear before the game launches rather than within the gameplay itself—adds another layer of interest. Our data indicate that these pre‑game formats enjoy a clear advantage in recall and attribution compared with intrinsic in‑game placements. This distinction matters because, while we may remember a commercial seen on television or a banner on a social feed, that memory does not always translate into brand linkage. Gaming appears to operate in its own league regarding this metric, which likely explains why companies like Xbox and EA are increasingly exploring ad‑based gaming models.
It is essential to note that Xbox’s ads are pre‑game, not embedded within the game world. In‑game ad formats tend to excel further down the funnel, delivering stronger lifts in brand image, consideration, interest, and likeability. A combined strategy—leveraging both pre‑game and in‑game ads—could offer advertisers a comprehensive toolkit, though it also risks heightened pushback from players if not handled delicately.
Xbox has pledged that the ads will be non‑intrusive. By placing commercials before gameplay begins, the company aims to avoid breaking immersion. This approach benefits both the player—who enjoys an uninterrupted experience—and the advertiser, who wants the campaign to feel like a natural part of the journey rather than a disruption. Relevance will be key.
No gamer wants to see an advertisement for cat food when they don’t own a cat, or a promotion for a game they have already completed. Contextual, targeted ads that make sense for the individual player will help keep audiences engaged and prevent them from abandoning the session at the first sign of irrelevant content.
Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to these pre‑game ads; 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 mindset from Xbox CEO Asha Sharma, who has shown a willingness to experiment with new business models. Only time will reveal whether this gamble pays off.
Historically, many gaming ad campaigns have relied on the classic "watch an ad, earn an extra life" mechanic. Xbox’s proposition is different: players would watch an ad to access a game they already own.
Our existing data set does not yet indicate how this particular exchange will be received. Research on ad format perception does provide some guidance. When participants who remembered an ad were asked to describe the format, "non‑intrusive" and "immersive" emerged as the top descriptors. If Xbox—and potentially other platforms in the future—aim to make advertising a success in gaming, these two qualities will be critical to monitor.
My forecast is that Xbox will neither be the first nor the last to trial such strategies. Advertising within games has existed for years, but it has rarely been implemented with the player’s experience as the primary focus. 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 attainable for everyday gamers.