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 that wariness is understandable.
The reputation of ads in the gaming world is mixed, often marred by redirects to unrelated sites or apps, misleading creative, and hide‑away close buttons that frustrate users. A recent study from eMarketer highlighted that 52 % of players would abandon a session if they encountered several disruptive ad elements. Losing half of an audience at the very moment you’re trying to engage them is hardly a winning tactic.
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 of a high quality.
With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of playing games continuing to climb, there is a genuine opportunity for well‑crafted ads to find a comfortable niche within the gaming ecosystem. The argument for offering a hybrid "ads‑for‑games" model is more compelling than many anticipate, especially when we look at the success of linear media.
Services such as Netflix, Disney+, and other streaming platforms have demonstrated that a steady subscription revenue stream can coexist with an ad‑supported tier, creating an additional source of income without alienating paying customers. Should Xbox’s experiment prove viable, it could not only preserve its subscriber base but also unlock a fresh revenue channel at a moment when the brand is eager for new cash flows. This development matters because console gaming is increasingly being positioned as a premium product. Prices for games, consoles, accessories, and downloadable content are rising, making it harder for the average consumer to justify the expense.
Xbox itself has noted that, when executed correctly, advertising can help lower the barrier to entry for gamers. Mobile gaming already offers a precedent: ad‑supported tiers let players dip their toes into a game without paying a large upfront fee, and many have embraced that model.
Importantly, the ad‑supported option would be entirely optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those who are price‑sensitive could choose the ad‑backed route. By offering a two‑tier system, Xbox aims to keep its loyal fan base happy while simultaneously widening its appeal to newcomers who might otherwise be deterred by cost. Although no formal survey data on Xbox’s latest announcement is available yet, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second commercial if it meant gaining an hour of gameplay in a beloved or new title.
Happydemics’ own data, derived from 285 in‑game campaigns across the United Kingdom and North America, consistently show that in‑game advertising outperforms TV, social, and other online formats in terms of recall and attribution. Players are more likely to remember an ad they saw while playing and correctly associate it with the sponsoring brand.
Xbox’s “around‑the‑game” approach—placing ads before the game launches rather than embedding them within the gameplay itself—adds another layer of intrigue. Our research indicates that these pre‑game placements achieve higher recall and attribution scores compared with traditional in‑game placements. This distinction matters because while we can often recall ads seen on television or scrolling through social media, we do not always link them to the correct brand. Gaming appears to occupy a unique space where ad memory and brand association are especially strong, which likely explains why companies like Xbox and EA are increasingly exploring ad‑based models.
It is crucial to note that Xbox’s ads would not interrupt the actual gameplay; they would appear before the session begins. Pre‑game ads avoid breaking immersion, a factor that benefits both the player—who enjoys an uninterrupted experience—and the advertiser, who wants the campaign to feel like a natural part of the overall journey rather than an annoyance. Relevance will be key. Nobody wants to see a promotion for cat food when they don’t own a cat, or a trailer for a game they have already completed.
By delivering contextual, well‑targeted ads, Xbox can keep players from abandoning the experience while providing brands with a premium platform to reach fresh audiences. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how gamers will react to these pre‑game advertisements, and the second is whether the ad revenue will be sufficient to justify a long‑term strategy. The move toward ad‑supported game streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has shown a willingness to experiment.
Time will ultimately reveal whether the approach pays off. Historically, many gaming ad models have followed a "watch an ad, earn an extra life" formula. Xbox’s proposal is different: it asks players to watch a commercial to access a game they already own.
Our existing data set does not yet tell us 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 received attributes. If Xbox—and potentially other platforms—are to make gaming ads a success, they will need to focus closely on delivering those qualities.
My forecast is that Xbox will not be the first nor the last company to experiment with this model. Advertising in games has existed for years, but rarely with the player 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 accessible to everyday gamers.