Virginie Chesnais serves as Chief Marketing Officer at Happydemics, an analytics platform focused 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; players often encounter redirects to unrelated sites, misleading messages, or hidden close buttons that are difficult to locate, leading to frustration and annoyance.
A recent study conducted by eMarketer revealed that 52 % of respondents would stop playing a title if they ran into several intrusive ad elements. Losing half of an audience at the moment you are trying to engage them is hardly an effective approach.
However, advertisements do not have to be detrimental. The same research indicated that one in five gamers would actually increase the frequency with which they play a game if the in‑game ads were of a high standard and felt relevant.
With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming continuing to climb, well‑crafted advertisements could find a welcoming niche within the gaming ecosystem. The argument for integrating an ads‑for‑games model is stronger than many anticipate, as it has already shown promise in linear media. Services such as Netflix, Disney+ and other streaming platforms have demonstrated that offering a lower‑cost, ad‑supported tier can generate substantial revenue while still delivering a consistent product.
Should Xbox’s experiment succeed, it would not only preserve the paying subscriber base but also unlock an entirely new, previously untapped source of income—something the brand could greatly benefit from at this juncture. This issue matters because console gaming is increasingly being positioned as a premium experience.
The price tags attached to new games, consoles, accessories, and downloadable content are rising steadily, making it harder for the average consumer to justify the expense and creating a barrier for casual or budget‑conscious players. Xbox itself has stated that, when executed correctly, advertising can lower the financial threshold required to access games. Mobile gaming already provides a clear example: ad‑supported tiers let players enjoy titles without paying large upfront fees, expanding the overall player pool.
It is also crucial to note that any ad‑based option would be entirely optional. Gamers who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads. By offering a two‑tier system, Xbox hopes to keep its loyal fan base while simultaneously making games more approachable for newcomers.
Although there is no specific survey data on this particular 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 newly released title. Xbox likely has internal data supporting this assumption. 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 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. This is where Xbox’s “around‑the‑game” strategy—placing ads before a session begins rather than embedding them within the gameplay—becomes intriguing. Our data indicate that pre‑game placements generate higher recall and stronger brand attribution than intrinsic, in‑game placements.
The distinction matters because while we can often recall ads seen on TV or scrolling through a feed, those memories do not always translate into clear brand connections. Gaming appears to sit in a league of its own for this metric, which explains why companies like Xbox and EA are increasingly exploring ad‑based models. It is essential to clarify that Xbox’s ads will not interrupt the actual gameplay; they will appear prior to the start of a session.
Traditional in‑game formats tend to excel further down the funnel, delivering better outcomes for brand‑image uplift, consideration, interest, and overall likability. A hybrid approach—combining pre‑game and in‑game ads—could offer advertisers the best of both worlds, though it may also provoke greater pushback from players who value an uninterrupted experience.
Xbox has pledged that the ads will be non‑intrusive. By delivering them before the game loads, the immersive experience remains intact, which benefits both the player and the advertiser. Advertisers want their messages to feel like a natural part of the experience rather than a disruptive interruption.
Relevance will be another key factor. Nobody 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.
By ensuring ads are contextually appropriate and providing a clear rationale for their placement, Xbox can keep players from abandoning a session at the sight of an irrelevant commercial, while giving brands a high‑impact platform to reach fresh audiences. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how players will react to the presence of 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 streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with new business models. Only time will reveal whether this strategy pays off.
Historically, our work on gaming ads has centered around “watch an ad, earn an extra life” type incentives. Xbox, by contrast, is asking users to watch an ad merely to access a game they already own. Our existing data set does not yet show how this particular exchange will be received.
Related research on ad‑format perception—where respondents who recall an ad are asked to describe the format—has highlighted “non‑intrusive” and “immersive” as the most favored descriptors. If Xbox and future adopters aim to make advertising a lasting part of gaming, these two attributes will be critical metrics to monitor. My forecast is that Xbox will neither be the first nor the last platform to trial such a model.
Advertising in games has existed for many years, but it has rarely been implemented with the player’s experience as the primary focus. 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 gamers.