Virginie Chesnais serves as chief marketing officer at the ad‑technology analytics firm Happydemics. For many years, gamers have viewed in‑game advertising with suspicion, and the wariness is understandable.
The reputation of ads in video games is mixed at best, with common complaints ranging from redirects to unrelated websites or apps, misleading creative, and the frustration of trying to locate a tiny close button that often seems hidden. A recent study conducted by eMarketer highlighted that 52 percent of players would abandon a game if they encountered several disruptive advertising elements. Losing half of your audience at the moment you’re trying to engage them is hardly an effective tactic. Nevertheless, advertising does not have to be a negative experience.
The same research revealed that one in five gamers would actually increase the frequency with which they play a title if the in‑game ads were of high quality and relevance. This suggests that, when executed well, ads can enhance rather than detract from the gaming experience. Xbox is currently piloting a new ad‑supported game‑streaming service, and as the overall cost of playing continues to climb, well‑crafted advertisements could find a welcoming niche within the medium. The argument for a hybrid "ads‑for‑games" model is more compelling than many anticipate, and it has already been validated to some extent by linear media platforms.
Services such as Netflix, Disney+, and other streaming giants have demonstrated that offering a lower‑cost, ad‑supported tier can generate substantial revenue while keeping a broad subscriber base. If Xbox’s experiment proves viable, it could not only preserve the existing paying community but also unlock an entirely new revenue stream—something the brand could certainly use given recent financial pressures. This development matters because console gaming is increasingly being positioned as a premium product. Prices for games, consoles, accessories, and downloadable content have risen steadily, making it harder for the average consumer to justify the expense.
Xbox itself has stated that, when handled correctly, advertising can lower the barrier to entry for gamers. Mobile gaming already provides a clear example: ad‑supported versions let players dip their toes into a game without the need for a large upfront purchase, often unlocking the full experience after watching a short commercial. Importantly, the model remains optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads altogether.
By offering a two‑tier system—ad‑supported and ad‑free—Xbox aims to retain its loyal fan base while simultaneously making games more accessible to newcomers who might otherwise be priced out. While there is no specific survey data on Xbox’s latest rollout, 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 on a beloved or new title. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that in‑game ads consistently outperform traditional TV, social, and online placements in terms of recall and accurate brand attribution.
In other words, players are more likely to remember and correctly associate an ad they saw while gaming with the brand that served it. Xbox’s “around‑the‑game” approach—showing ads before the game loads rather than embedding them within the gameplay—adds another layer of interest. Our data indicate that pre‑game placements generate higher recall and attribution scores compared with intrinsic in‑game spots. This distinction matters because, although we can often remember commercials seen on television or scrolling through a social feed, those memories do not always translate into clear brand connections.
Gaming appears to sit in a league of its own regarding this metric, which may explain why companies like Xbox and EA are increasingly exploring ad‑based models. It is crucial to note that Xbox’s advertisements are not embedded within the game itself; they appear pre‑game. 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 strategy—leveraging both pre‑game and in‑game ads—could theoretically offer advertisers the best of both worlds, though it also risks greater pushback from players who are sensitive to interruptions. Xbox has pledged that any ads will be non‑intrusive.
By placing commercials before the actual gameplay begins, the company hopes to preserve the immersive experience that gamers value. This approach benefits both players, who avoid disruption during play, and advertisers, who want their messages to be part of a seamless experience rather than an annoyance. Relevance will be key. No gamer wants to see an ad for cat food when they don’t own a cat, or a promotion for a game they have already completed.
Contextual, targeted advertising that aligns with a player’s interests will help keep the audience engaged and prevent them from abandoning the session at the sight of an irrelevant spot. For brands, this means a more effective platform for reaching new demographics. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how players will truly react to a regular stream of pre‑game ads; the second is whether the revenue generated will be sufficient to justify a long‑term commitment to the model. The move to explore ad‑supported streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who appears willing to experiment with new monetisation strategies.
Only time will reveal whether this gamble pays off. Historically, many gaming ad campaigns have relied on a "watch an ad, get an extra life" premise.
Xbox’s proposal is different: players would watch an ad to access a game they already own, a nuance that our existing data set does not directly address. However, broader research on ad format perception shows that descriptors such as "non‑intrusive" and "immersive" rank highly among positive responses.
If Xbox—and potentially other platforms in the future—can deliver ads that meet these criteria, they may set a new standard for advertising within interactive entertainment. My forecast is that Xbox will neither be the first nor the last major console maker to test this approach. Advertising has been part of gaming for many years, but it has rarely been designed with the player’s experience as the primary focus. Should Xbox succeed in marrying relevance, non‑intrusiveness, and optionality, it could pave the way for similar initiatives across the industry, ultimately making video games more affordable and reachable for the everyday gamer.