Virginie Chesnais serves as the 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 skepticism is not unfounded.
The reputation of ads in video games is mixed; players often encounter redirects to unrelated websites or apps, misleading content, or tiny close buttons that are difficult to locate, all of which generate frustration. A recent study conducted by eMarketer highlighted that 52 % of gamers would stop playing if they were repeatedly interrupted by intrusive advertising features. Losing more than half of an audience at the moment you are trying to engage them is clearly a poor strategy.
However, 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. With Xbox currently piloting an ad‑supported game‑streaming service, and with the overall cost of gaming continuing to climb, well‑crafted advertisements could find a welcoming niche within the medium.
The argument for integrating a form of "ads‑for‑games" model is more compelling than many assume, especially when we look at the success of linear media. Streaming platforms such as Netflix, Disney+, and others have demonstrated that offering both ad‑free and ad‑supported tiers can generate substantial revenue while still delivering a consistent service. Should Xbox’s experiment prove successful, it would not only preserve its existing subscription base but also unlock an entirely new revenue stream at a moment when the company could benefit from additional income. This development matters because console gaming is increasingly positioned as a premium offering.
Prices for games, consoles, accessories, and downloadable content keep rising, making it harder for the average consumer to justify the expense. As Xbox noted in its announcement, well‑executed advertising can lower the barrier to entry for gamers. Mobile gaming has already shown that ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases.
Crucially, the system would be optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those who are comfortable with occasional ads could enjoy a lower‑cost option.
By presenting a two‑tier model, Xbox hopes to keep its loyal fan base satisfied while simultaneously broadening its appeal to 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 30‑second commercial if it granted them an hour of gameplay in a favorite or brand‑new title.
Happydemics’ data, derived from 285 in‑game campaigns across the UK and North America, consistently shows that in‑game advertising outperforms television, social, and online formats in terms of recall and attribution. In other words, players are more likely to remember an ad they see while gaming and to correctly associate it with the sponsoring brand.
Xbox’s “around‑the‑game” approach—ads that appear before the game starts rather than during play—adds another layer to this picture. Our research indicates that pre‑game placements achieve higher recall and attribution than ads embedded directly within the gameplay environment.
This distinction is important because while we can often recall ads seen on TV or scrolling through social feeds, we do not always link them to the correct brand. Gaming, however, appears to create a stronger mental connection, which likely explains why companies like Xbox and EA are exploring ad‑based models more aggressively. It is also worth noting that Xbox’s ads are not meant to be intrusive.
By placing commercials before the gaming session begins, the company aims to preserve the immersive experience once the player is inside the virtual world. This separation benefits both the gamer—who avoids interruptions mid‑play—and the advertiser, who wants their message to be part of a positive experience rather than a disruption.
Relevance will be key. No one 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 player will reduce the likelihood of users abandoning the session at the sight of an irrelevant commercial, while simultaneously providing brands with a high‑quality platform to reach new audiences. Nevertheless, Xbox is venturing into uncharted territory. The first unknown is how players will react to pre‑game advertising; 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 the boldness of Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with innovative approaches.
Only time will reveal whether this gamble pays off. Historically, many of our gaming‑ad projects have involved "watch an ad, get an extra life" mechanics. Xbox’s proposal differs: it asks players to watch an ad to gain access to a game they already own. Our current data set does not yet indicate how this will be received.
However, broader research on ad‑format perception shows that participants frequently describe non‑intrusive and immersive ads with positive adjectives. If Xbox and future adopters aim to make advertising a lasting component of gaming, these two attributes—non‑intrusiveness and immersion—will be essential metrics to monitor. My forecast is that Xbox will neither be the first nor the last platform to test this strategy. Advertising has been part of gaming for many years, but it has rarely been designed with the player’s experience at the forefront.
Should Xbox succeed in delivering ads that feel seamless and valuable, it could pave the way for other companies to follow suit, ultimately making video games more affordable and accessible for everyday gamers.