Virginie Chesnais serves as chief marketing officer at the ad‑technology analytics firm Happydemics. For many years, gamers have looked at 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, misleading content, or dismiss buttons that are difficult to locate, all of which generate frustration.
A recent study conducted by eMarketer highlighted that 52 % of gamers would abandon a session if they ran into several 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 detrimental. 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 a high quality and felt relevant.
With Xbox currently piloting an ad‑supported game‑streaming platform and the overall cost of playing continuing to climb, premium‑grade advertisements could find a natural home in the gaming ecosystem. The argument for introducing a modest advertising model to games is stronger than many anticipate, and it is already partially validated by the success of linear media. Services such as Netflix, Disney+, and other video‑streaming platforms have demonstrated that offering an ad‑supported tier alongside a subscription can generate a substantial new revenue stream while keeping the core service affordable. If Xbox’s experiment proves viable, the company could not only preserve its paying subscriber base but also unlock a previously untapped source of income at a moment when the brand is seeking fresh cash flow.
This development matters because console gaming is increasingly being positioned as a premium product. The price tags attached to new consoles, full‑price games, accessories, and downloadable content (DLC) are rising, creating a financial barrier for the average enthusiast.
As Xbox itself noted in its announcement, well‑executed advertising can lower the barrier to entry and make gaming more accessible. The mobile‑gaming sector has already shown that ad‑supported tiers can serve as a gateway for players who are unwilling or unable to make large upfront purchases.
By offering a free‑to‑play option that is supported by short, optional advertisements, developers can attract a broader audience while still monetising through ad revenue. Crucially, participation would remain optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads.
This two‑tier system aims to keep loyal fans satisfied while simultaneously inviting newcomers who might be deterred by high upfront costs. Although there is no concrete survey data on Xbox’s specific plan yet, it is reasonable to assume that most gamers would tolerate a 30‑second commercial if it granted them an hour of gameplay on a beloved or newly released title.
Xbox’s own analytics are likely to confirm this hypothesis. Happydemics’ data, drawn from 285 in‑game campaigns across the United Kingdom and North America, consistently show that advertisements placed within games outperform traditional TV, social, and online ads when it comes to recall and attribution. Players are more likely to remember an ad they saw while playing and to correctly associate it with the sponsoring brand. Xbox’s “around‑the‑game” strategy—where ads appear before the gameplay begins rather than embedded within the experience—adds another layer of intrigue.
Our research indicates that these pre‑game placements generate higher recall and attribution scores compared with ads that appear directly inside the game world. The distinction matters because, while we can often recall ads seen on television or scrolling through social feeds, that recall does not always translate into a clear brand connection. Gaming appears to occupy a unique position where both recall and brand linkage are strong, which likely explains why companies such as Xbox and EA are increasingly exploring ad‑based models. It is essential to note that Xbox’s plan centres on pre‑game advertisements, not intrusive in‑game pop‑ups.
Traditional in‑game formats tend to excel further down the marketing funnel, delivering stronger lifts in brand image, consideration, interest, and likability. A hybrid approach that combines both pre‑game and in‑game ads could theoretically deliver the best of both worlds, though it also risks provoking greater pushback from players who value an uninterrupted experience. Xbox has pledged that any ads will be non‑intrusive.
By delivering commercials before the game launches, the company hopes to preserve the immersive quality of the gameplay itself. This approach benefits both the player—who can enjoy a seamless session—and the advertiser, who wants the ad to be part of the experience rather than a disruptive interruption. Relevance will be key.
No one appreciates being served a cat‑food commercial when they don’t own a cat, or an advertisement for a game they have already completed. By ensuring that ads are contextually appropriate and tied to the player’s interests, Xbox can minimise the risk of users abandoning the session at the first sign of an irrelevant spot.
Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how gamers will react to a model that asks them to watch ads to access a game they already own. The second unknown is whether the ad revenue generated will be sufficient to justify the model as a long‑term offering.
The decision to explore ad‑supported streaming reflects the boldness of Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with unconventional strategies. Time will reveal whether this gamble pays off.
Historically, our work in gaming advertising has focused on “watch an ad, earn an extra life” type incentives. Xbox’s proposal is different: it asks players to view an ad simply to launch a game they already possess. Our existing data set does not yet show how this particular trade‑off will be perceived. Nevertheless, research on ad‑format perception indicates that when respondents are asked to describe ads they remember, the descriptors “non‑intrusive” and “immersive” consistently rank among the most favourable.
If Xbox—and perhaps other platforms in the future—aim to make gaming ads successful, these two attributes will be critical performance indicators. My forecast is that Xbox will neither be the first nor the last major console maker to test such a model.
Advertising within games has existed for many years, but it has rarely been designed with the player’s experience at the forefront. Should Xbox manage to strike the right balance, it could pave the way for similar initiatives across the industry, ultimately making video games more affordable and reachable for everyday players.