Virginie Chesnais serves as chief marketing officer at the ad‑tech analytics firm Happydemics. She has long observed that gamers have historically been skeptical of advertising embedded within games, and for good reason. The reputation of in‑game ads is mixed; many players complain about redirects to unrelated websites or apps, misleading content, and the difficulty of locating a close button, all of which can ruin the experience.
A recent study conducted by eMarketer highlighted that 52 % of respondents would abandon a game if they encountered multiple disruptive advertisements. Losing half of an audience at the moment you are trying to engage them is hardly an effective strategy.
Nevertheless, advertisements do not have to be synonymous with irritation. The same survey revealed that one in five gamers would actually increase the frequency with which they played a title if the in‑game ads were of a high quality and felt relevant. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of playing continuing to climb, there is a genuine opportunity for well‑crafted ads to find a welcoming home within the gaming ecosystem.
The rationale for introducing a modest ad‑for‑games model is more compelling than many assume, and it is already validated to a degree by linear media. Services such as Netflix, Disney+, and other streaming platforms have demonstrated that a hybrid approach—offering both ad‑free and ad‑supported tiers—can generate substantial revenue while expanding the audience. Should Xbox’s experiment succeed, it could not only preserve its subscription base but also unlock a fresh, previously untapped revenue stream at a moment when the brand is seeking additional financial support. This development matters because console gaming is increasingly positioned as a premium offering.
Prices for games, consoles, accessories, and downloadable content have risen steadily, making it harder for the average consumer to justify the expense. The result is a growing barrier that excludes casual or budget‑conscious gamers.
Xbox itself has noted that, when executed correctly, advertising can lower the cost of access to gaming experiences. Mobile gaming already provides a clear illustration: ad‑supported tiers enable players to try a game without paying an upfront fee, allowing them to decide later whether to invest more money. Crucially, any ad‑based option would be optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads.
By offering a two‑tier system, Xbox aims to keep its loyal fanbase satisfied while simultaneously opening the door for newcomers who might otherwise be deterred by price. Although there is no concrete survey data on this specific 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 that supports this 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 other online formats in terms of ad recall and attribution. Players are more likely to remember an ad they see while playing and correctly associate it with the brand that served it. The "around‑the‑game" approach that Xbox is exploring—showing ads before the game starts rather than embedding them within the gameplay—adds another layer of advantage.
Our data indicate that pre‑game placements achieve higher recall and attribution scores compared with ads that appear directly inside the game world. This distinction is important because while we may notice advertisements on TV or scrolling through a feed, that awareness does not always translate into brand recognition.
Gaming appears to occupy a unique space where recall and attribution are markedly stronger, which explains why companies like Xbox and EA are increasingly investigating ad‑based models. It is worth noting, however, that Xbox’s ads are intended to be pre‑game rather than in‑game.
Traditional in‑game formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and overall likability. A combined strategy—leveraging both pre‑game and in‑game placements—could theoretically offer advertisers the best of both worlds, but it also risks provoking greater pushback from players who are sensitive to interruptions. Xbox has pledged that any ads will be non‑intrusive. By placing commercials before the gameplay begins, the company hopes to preserve the immersive experience that gamers value.
This approach benefits both the player, who can enjoy an uninterrupted session, and the advertiser, who wants their message to be part of the experience 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 user will help prevent players from abandoning the session at the sight of an irrelevant spot, while giving brands an effective platform to reach new audiences.
Nevertheless, Xbox is navigating uncharted territory. The first unknown is how players will react to a new ad format, and 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 demonstrated a willingness to experiment with novel ideas. Only time will reveal whether this gamble pays off.
Historically, many gaming ad programs have operated on a "watch an ad, earn an extra life" premise. 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 indicate how this will be received. Research on ad‑format perception—where participants who recall an ad are asked to describe the experience—shows that "non‑intrusive" and "immersive" are among the most positively‑rated descriptors.
If Xbox and future adopters aim to make gaming ads successful, these two attributes will be critical metrics to monitor. In my view, Xbox will neither be the first nor the last platform to test this model. Advertising in 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 other gaming companies to follow suit, ultimately making video games more affordable and accessible for everyday players.