Virginie Chesnais serves as Chief Marketing Officer at Happydemics, an analytics platform that specializes in advertising technology. For years, many gamers have viewed 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 creative, or dismiss buttons that are difficult to locate, all of which generate frustration. A recent study conducted by eMarketer highlighted the severity of the problem: 52 percent of respondents said they would stop playing a title after encountering multiple intrusive ad elements.
Losing half of an audience at the moment you are trying to engage them is hardly an effective strategy. Nevertheless, advertising does not have to be a negative experience. The same survey revealed that one in five gamers would actually increase the frequency with which they played a game if the advertisements were of high quality and well integrated.
This suggests that, when executed thoughtfully, ads can add value rather than detract from enjoyment. Xbox is currently experimenting with an ad‑supported game‑streaming service at a time when the overall cost of playing is climbing steadily.
In such an environment, premium‑quality advertising could find a natural home within the gaming ecosystem. The rationale for a hybrid "ads‑for‑games" model is more compelling than many anticipate, and it is already validated to some extent by the success of linear media platforms. Services such as Netflix, Disney+, and other video‑streaming giants have demonstrated that offering an ad‑supported tier can generate significant revenue while keeping a broader audience engaged. Should Xbox’s experiment prove viable, the company would not only preserve its subscription base but also unlock a brand‑new, previously untapped source of income—something the brand could certainly use given recent financial pressures.
This issue matters because console gaming is increasingly positioned as a premium offering. Prices for games, consoles, accessories, and downloadable content have risen to levels that many casual players find difficult to justify, creating a barrier to entry for the average consumer.
Xbox itself has stated that, when handled correctly, advertising can lower the cost of accessing games. The mobile‑gaming sector already provides a clear example: ad‑supported tiers allow players to experience titles without paying large upfront fees, expanding the market by attracting users who might otherwise stay away. Crucially, the model remains optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads.
By presenting a two‑tier system—ad‑supported and ad‑free—Xbox hopes to keep its loyal fan base while simultaneously making games more approachable for newcomers. Although there is no published survey data on this specific rollout yet, it is reasonable to assume that a large majority of gamers would tolerate a short, 30‑second commercial if it granted them an hour of gameplay in a beloved or brand‑new title.
Xbox’s internal data likely supports this hypothesis. Happydemics has analyzed 285 in‑game campaigns across the United Kingdom and North America, finding that in‑game advertisements consistently outperform traditional TV, social, and online formats 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 sponsoring brand. Xbox’s “around‑the‑game” approach—displaying ads before the game starts rather than embedding them within the gameplay—adds another layer of interest.
Our research indicates that these pre‑game placements generate higher recall and attribution scores compared with intrinsic in‑game placements. This distinction matters because, while we may recall an ad seen on television or scrolling through a social feed, we do not always link it to the brand that aired it. Gaming appears to operate in its own league for this metric, which explains why companies like Xbox and EA are increasingly exploring ad‑based models.
It is also important to note that Xbox’s ads are not in‑game; they appear before the session begins. Traditional in‑game formats tend to excel further down the funnel, delivering stronger lifts in brand image, consideration, interest, and likability. A combined strategy—leveraging both pre‑game and in‑game ads—could theoretically provide advertisers with the best of both worlds, though it might also provoke greater pushback from players who are sensitive to ad frequency.
Xbox has promised that the advertisements will be non‑intrusive. By placing them before gameplay, the company aims to preserve the immersive experience that gamers value.
This approach benefits not only players, who avoid interruptions during play, but also advertisers, who want their messages to be part of a seamless experience rather than a disruptive annoyance. Relevance will be key. No gamer wants to see an advertisement for cat food when they do not own a cat, or for a game they have already completed.
Contextual, well‑targeted ads that provide a clear rationale for being shown will help Xbox keep players from abandoning the session while giving brands an effective platform to reach new audiences. Nonetheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to 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 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 when respondents recall an ad, they often describe it as "non‑intrusive" and "immersive," two attributes that rank among the most favorable. If Xbox—and potentially other platforms in the future—aim to make advertising a lasting component of gaming, these two metrics will be essential to monitor.
My forecast is that Xbox will neither be the first nor the last company to test such a strategy. Advertising in games has existed for many years, but it has rarely been designed with the player’s experience at the forefront. Should Xbox succeed, it could pave the way for other developers and publishers to adopt similar models, ultimately making video games more affordable and accessible for everyday gamers.