Virginie Chesnais serves as chief marketing officer at the ad‑technology analytics firm Happydemics. 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 or apps, misleading creative, and dismissible close buttons that are difficult to locate, all of which generate frustration. A recent study by eMarketer highlighted that 52 % of gamers would abandon a session if they ran into several disruptive ad elements.
Losing half of an audience at the moment you’re trying to engage them is hardly an effective approach. However, advertisements do not have to be a negative experience.
The same research indicated 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 the overall cost of playing continuing to climb, premium‑grade advertising could find a natural home in the gaming ecosystem. The argument for integrating a modest ad‑for‑games model is stronger than many anticipate, and it is already partially validated by the success of linear media platforms. Services such as Netflix, Disney+, and other streaming giants have demonstrated that offering both ad‑free and ad‑supported tiers can generate significant revenue while keeping a broad subscriber base.
Should Xbox’s experiment succeed, it would not only preserve its paying customers through the existing subscription model but also unlock an entirely new revenue stream at a moment when the company could benefit from additional cash flow. The relevance of this development is underscored by the fact that console gaming is increasingly positioned as a premium product.
Prices for games, consoles, accessories, and downloadable content have risen steadily, creating a financial barrier for the average player. Xbox itself has stated that, when executed correctly, advertising can lower the cost of entry to gaming.
The mobile‑gaming sector already shows how ad‑supported tiers can provide a gateway for users who might otherwise be unable to afford large upfront purchases. Importantly, the ad‑supported option would be entirely optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those willing to tolerate a short advertisement could enjoy a reduced‑price or even free access to certain titles.
By offering a two‑tier system, Xbox aims to retain its loyal fan base while simultaneously expanding accessibility for newcomers. Although concrete survey data on this specific initiative are not yet available, it is reasonable to assume that most gamers would accept a 30‑second commercial if it granted them an hour of playtime on a beloved or new game. Xbox likely has internal data supporting that assumption. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America reveals that in‑game advertisements consistently outperform TV, social, and other online formats in terms of recall and attribution.
Players are more likely to remember an ad they saw while gaming and correctly associate it with the brand that served it. This advantage becomes even more pronounced when ads are placed “around‑the‑game,” meaning they appear before the game launches rather than embedded within the gameplay itself.
Our data show that these pre‑game placements achieve higher recall and attribution scores compared with intrinsic in‑game spots. The distinction matters because remembering an ad on a television screen or scrolling feed does not always translate into brand recognition. Gaming appears to operate in its own league for this metric, which likely explains why companies such as Xbox and EA are increasingly exploring ad‑based models.
It is crucial to note that Xbox’s plan centers on pre‑game ads, not intrusive in‑game interruptions. While in‑game formats excel further down the marketing funnel—driving brand‑image uplift, consideration, interest, and likeability—combining both pre‑game and in‑game ads could provide advertisers with a balanced toolkit. However, this hybrid approach might also provoke greater resistance from players who value an uninterrupted experience. Xbox has promised that its advertisements will not be intrusive.
By serving ads before gameplay begins, the company aims to preserve the immersive nature of the session. This approach benefits both gamers, who avoid mid‑game disruptions, and advertisers, who want their messages to be part of a seamless experience rather than a nuisance. Relevance will be key. No gamer wants to see an ad for cat food when they do not own a cat, or a promotion for a game they have already completed.
Contextual, well‑targeted ads that make sense to the player will reduce the likelihood of users abandoning the session and will give brands a more effective platform for reaching fresh audiences. Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to ads placed before a game they already own. The second is whether the ad revenue will be sufficient to justify a long‑term strategy.
The move to explore ad‑supported streaming reflects a bold, risk‑taking attitude from Xbox CEO Asha Sharma, but only time will reveal whether the gamble pays off. Historically, many gaming ad models have followed a “watch an ad, earn an extra life” framework.
Xbox’s proposal differs: it asks players to watch an ad to access a game they already possess. Our existing data set does not yet indicate how this will be received.
Research on ad‑format perception shows that when participants recall an advertisement, they tend to describe the format as “non‑intrusive” and “immersive.” These two descriptors emerged as the most favored in recent studies. If Xbox—and potentially other platforms in the future—aims to make gaming ads successful, focusing on these qualities will be essential. In my view, Xbox will neither be the first nor the last company to test this kind of model. Advertising has existed in games for years, but often without the player’s experience at the forefront.
Should Xbox perfect a user‑friendly, optional ad system, it could pave the way for similar initiatives across the industry and, more importantly, make video games more affordable and accessible for everyday gamers.