Virginie Chesnais serves as chief marketing officer at Happydemics, an ad‑tech analytics firm. For many years gamers have been skeptical of advertising that appears inside games, and that distrust is not unfounded.
In‑game ads have earned a mixed reputation because they often redirect users to unrelated websites or apps, present misleading content, or feature close buttons that are difficult to locate, leading to frustration and a sense of intrusion. A recent study by eMarketer highlighted that 52 % of respondents would abandon a game after encountering multiple disruptive ad elements. Losing half of an audience at the very moment you are trying to engage them is hardly a winning formula.
However, the same research also revealed a more optimistic finding: one in five gamers said they would actually play a title more often if the ads were high‑quality and well integrated. This suggests that, when executed properly, advertising does not have to be a nuisance.
Xbox is currently piloting an ad‑supported game‑streaming service, and as the overall cost of gaming continues to climb, premium, well‑crafted ads could find a receptive home within the medium. The rationale for introducing an ads‑for‑games model is stronger than many assume, and it mirrors successful strategies already proven in linear media. Services such as Netflix, Disney+, and other video platforms have demonstrated that offering an ad‑supported tier can generate significant revenue while keeping a broader audience engaged. Should Xbox’s experiment succeed, it would not only preserve its subscriber base but also unlock a fresh, previously untapped source of income—something the brand could certainly use given recent financial pressures.
The importance of this development lies in the fact that console gaming is increasingly being positioned as a premium experience. Prices for games, consoles, accessories, and downloadable content have risen steadily, creating a financial hurdle for the average player.
Xbox itself has acknowledged that, when handled correctly, advertising can lower the barrier to entry and make gaming more affordable. 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, any advertising model Xbox introduces will be optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads.
By offering a two‑tier system—ad‑supported and ad‑free—Xbox hopes to retain its loyal fanbase while simultaneously attracting newcomers who might be deterred by high costs. Although no formal survey data on this specific launch is available yet, it is reasonable to predict that most gamers would tolerate a 30‑second commercial if it granted them an hour of gameplay on a beloved or new title.
Happydemics’ analysis of 285 in‑game campaigns across the UK and North America shows that in‑game ads consistently outperform TV, social, and other online formats in terms of recall and accurate brand attribution. In other words, players are more likely to remember and correctly associate the brand with the ad when it appears within a gaming context.
Xbox’s “around‑the‑game” approach—showing ads before the game starts rather than during gameplay—adds another layer of appeal. Our data indicate that pre‑game placements achieve higher recall and attribution scores compared with ads embedded directly inside the game world. This distinction matters because, while we can often recall ads seen on television or scrolling through social feeds, those memories do not always translate into a clear brand connection. Gaming appears to be in a league of its own for forging that link, which explains why companies like Xbox and EA are exploring ad‑based models more aggressively.
It is essential to note that Xbox’s ads will not interrupt the core gameplay; they will appear in the pre‑game lobby or loading screen, preserving the immersive experience. In‑game ad formats, by contrast, tend to excel further down the conversion funnel, boosting brand image, consideration, interest, and likability.
A hybrid strategy that combines both pre‑game and in‑game placements could offer advertisers the best of both worlds, though it also risks provoking greater pushback from players who value an uninterrupted experience. For the advertising to succeed, relevance will be key. Gamers are unlikely to appreciate ads for cat food if they do not own a cat, or promotions for games they have already completed. Contextual, well‑targeted ads that provide a clear rationale for their presence will help prevent players from abandoning the session at the first sign of a commercial, while also delivering brands a high‑impact platform to reach new audiences.
Xbox is venturing into relatively uncharted territory. The first unknown is how players will react to pre‑game advertising; the second is whether the revenue generated will justify making the model a permanent feature.
The decision to explore ad‑supported streaming reflects the boldness of Xbox CEO Asha Sharma, who has demonstrated a willingness to take calculated risks. Only time will reveal whether this gamble pays off. Historically, many gaming ad programs have relied on “watch an ad, earn 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 existing data set does not yet indicate how this will be received. However, broader research on ad‑format perception shows that descriptors such as “non‑intrusive” and “immersive” are among the most positively received. If Xbox—and potentially other platforms—can deliver ads that meet these criteria, they will be well positioned for success. My forecast is that Xbox will neither be the first nor the last major console to test this approach.
Advertising in games is not new, 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 open new revenue avenues for the wider industry and make video games significantly more accessible to everyday gamers.