Virginie Chesnais serves as the chief marketing officer at Happydemics, an analytics platform that focuses on advertising technology. 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; players often encounter redirects to unrelated websites or apps, deceptive messaging, and close buttons that are difficult to locate, all of which generate frustration. A recent study conducted by eMarketer highlighted that 52 percent of gamers would abandon a session if they ran into multiple intrusive ad elements. Losing half of an audience the moment you try to engage them is hardly an effective approach.
However, advertisements do 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 high‑quality and unobtrusive. With Xbox presently piloting an ad‑supported game‑streaming service and the overall expense of gaming continuing to climb, premium‑grade ads could find a natural home in the console ecosystem.
The rationale for offering an ads‑for‑games model is more compelling than many assume, and it is already partially validated by the success of linear media platforms. Services such as Netflix, Disney+, and other video‑streaming giants have demonstrated that a steady subscription revenue stream can coexist with an ad‑supported tier, unlocking a new source of income while retaining paying customers. If Xbox’s experiment proves viable, the company could not only keep its existing subscriber base but also tap into a previously untapped revenue channel—something the brand could certainly use at this juncture. This development matters because console gaming is increasingly being positioned as a premium offering.
The price tags on new consoles, full‑price games, accessories, and downloadable content have risen sharply, making it harder for the average consumer to justify the spend. Xbox itself has stated that, when executed correctly, advertising can lower the barrier to entry and make gaming more affordable. Mobile gaming has already shown that ad‑supported tiers can give players a way to enjoy titles without paying large upfront fees, and a similar model could translate to the console space.
Crucially, participation would be optional. Players who prefer an ad‑free experience could continue to pay a subscription fee, while those willing to watch ads could access the same content at a reduced cost. By offering a two‑tier system, Xbox hopes to preserve its loyal fan base while simultaneously opening the doors to newcomers who might otherwise be deterred by cost.
Although concrete survey data on this specific launch is not yet available, it is reasonable to assume that most gamers would tolerate a brief 30‑second commercial if it meant playing a beloved or new title for an hour. Xbox likely has internal data that supports this hypothesis.
Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America indicates that in‑game advertising consistently outperforms television, social media, and other online formats in terms of recall and attribution. In other words, gamers are more likely to remember an ad they see while playing and correctly associate it with the brand that delivered it.
Xbox’s “around‑the‑game” approach—showing ads before the gameplay begins rather than embedding them within the game world—adds another layer of intrigue. Our data reveal that pre‑game placements generate stronger ad recall and attribution compared with intrinsic in‑game placements. This distinction matters because, while we can often recall ads seen on TV or scrolling through feeds, we do not always link those impressions to specific brands.
Gaming appears to occupy a unique space where ad recall translates directly into brand association, which may explain why companies like Xbox and EA are increasingly exploring ad‑based models. It is important to note that Xbox’s ads are not embedded in the gameplay itself; they appear pre‑game. Traditional in‑game formats tend to excel further down the conversion funnel, delivering higher lifts in brand image, consideration, interest, and likability.
A hybrid strategy that combines both pre‑game and in‑game ads could theoretically provide the best of both worlds for advertisers, though it might also provoke greater resistance from players. Xbox has pledged that the advertisements will be non‑intrusive. By placing ads before the game starts, the company aims to preserve the immersive experience once the player is actually in the virtual world. This approach benefits both gamers—who avoid interruptions during play—and advertisers, who want their messages to be part of a seamless experience rather than a disruptive nuisance.
Relevance will be key. No gamer wants to see a commercial 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 ensure that the audience does not abandon the session at the first sign of advertising, while also providing brands with a highly effective platform to reach new consumers. Nonetheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to pre‑game ads, and the second is whether the revenue generated will be sufficient to sustain the model over the long term. The move toward ad‑supported game streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who appears willing to experiment with new business models.
Time will reveal whether this gamble pays off. Historically, many gaming ad campaigns have relied on “watch an ad, earn an extra life” mechanics.
Xbox’s proposal is different: it asks players to watch an ad to access a game they already own. Our existing data set does not yet indicate 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 viewed attributes.
If Xbox—and potentially other platforms in the future—aim to make gaming ads successful, these two qualities will be critical metrics to monitor. My forecast is that Xbox will neither be the first nor the last major console provider to experiment with ad‑supported models. Advertising has been part of gaming for years, but rarely 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 and, importantly, make video games more financially accessible to the everyday gamer.