Virginie Chesnais serves as chief marketing officer at the ad‑tech analytics firm Happydemics. 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; players often encounter redirects to unrelated websites or apps, misleading creatives, and close buttons that are difficult to locate, all of which generate frustration.
A recent study by eMarketer highlighted that 52 % of gamers would abandon a session if they were bombarded with multiple intrusive ad elements. Losing half of an audience at the moment you are trying to engage them is hardly an effective approach.
Yet advertising does not have to be a negative experience. The same research indicated that one in five players 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 and the overall cost of gaming on a steady upward trajectory, well‑crafted ads could find a receptive home in the console ecosystem. The logic behind offering a hybrid "ads‑for‑games" model is more compelling than many assume, and it mirrors a pattern already proven in linear media.
Services such as Netflix, Disney+, and other video platforms have demonstrated that a tiered offering—one ad‑free, one ad‑supported—can generate substantial revenue while expanding the audience base. Should Xbox’s experiment succeed, it would not only preserve its subscription‑paying users but also unlock a fresh, previously untapped revenue stream at a moment when the brand is eager for additional income. This development matters because console gaming is increasingly positioned as a premium product. Prices for games, consoles, accessories, and downloadable content continue to climb, creating a financial barrier for the average player.
Xbox itself has stated that, when executed correctly, advertising can help lower the cost of entry to gaming. Mobile gaming already illustrates how ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases. Importantly, the model is entirely optional.
Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads. By offering a two‑tier system, Xbox aims to keep its loyal fan base while simultaneously making games more accessible to newcomers who might otherwise be priced out. Although concrete survey data on this particular rollout are not yet available, it is reasonable to predict that most gamers would tolerate a 30‑second commercial if it granted them an hour of gameplay on a beloved or new title.
Xbox likely has internal data supporting this assumption. Happydemics has analyzed 285 in‑game campaigns across the United Kingdom and North America, finding that in‑game advertising consistently outperforms television, social, and other online formats in terms of ad recall and attribution. In other words, players are more likely to remember an ad they see while gaming and correctly associate it with the brand that served it.
This advantage is amplified when ads are placed "around the game"—for example, before the gameplay begins—rather than embedded directly within the game world. Our data show that these pre‑game placements achieve higher recall and attribution scores than intrinsic in‑game slots. The distinction matters because, while we may recall an advertisement seen on TV or scrolling through a social feed, that recollection does not always translate into a clear brand link.
Gaming appears to occupy a unique niche where recall and brand association are stronger, which likely explains why companies such as Xbox and EA are increasingly exploring ad‑based models. It is crucial to note that Xbox’s plan involves pre‑game ads, not intrusive pop‑ups during play.
In‑game ad formats tend to excel further down the marketing funnel, driving brand‑image uplift, consideration, interest, and overall likability. A blend of pre‑game and in‑game ads could, theoretically, offer advertisers the best of both worlds, but it also risks heightened pushback from players who value uninterrupted immersion.
Xbox has pledged that any advertisements will be non‑intrusive. By placing ads before the game loads, the company aims to preserve the immersive experience once gameplay begins. This approach benefits both the player—who enjoys an ad‑free session—and the advertiser, who wants their message delivered in a context that feels integrated rather than disruptive.
Relevance will be another key factor. No gamer wants to see an ad for cat food when they do not own a cat, or a promotion for a game they have already completed. Contextual, targeted ads that align with a player’s interests will help prevent the "ad fatigue" that leads users to abandon a session. Nevertheless, Xbox is venturing into 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 move to explore ad‑supported streaming reflects the boldness of Xbox CEO Asha Sharma, who has shown a willingness to experiment with new business models. Only time will reveal whether the strategy pays off.
Historically, our work in gaming advertising has focused on "watch an ad, earn an extra life" mechanics. Xbox’s proposition is different: it asks players to watch an ad to access a game they already own. Our existing dataset does not provide a direct answer to how this will be received. However, broader research on ad format perception shows that descriptors such as "non‑intrusive" and "immersive" rank among the most positively received attributes.
If Xbox—and potentially other platforms—are to make gaming ads successful, they will need to prioritize these qualities. My forecast is that Xbox will not be the first nor the last to test this approach. Advertising in video games has existed for years, but it has rarely been designed with the player’s experience at its core.
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 everyday gamers.