Virginie Chesnais serves as the chief marketing officer at Happydemics, an analytics platform for advertising technology. For many years, gamers have viewed in‑game advertising with suspicion, and their concerns are understandable.
The reputation of ads in video games is mixed, often marred by redirects to unrelated sites, misleading content, or hide‑away close buttons that frustrate users. A recent study by eMarketer highlighted that 52 % of players would abandon a session if they encountered several intrusive ad elements.
Losing half of your audience at the moment you are trying to engage them is hardly a winning tactic. However, advertisements do not have to be a nuisance.
The same research revealed that one in five gamers would actually increase the frequency with which they play a title if the ads presented were of high quality and relevance. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming climbing steadily, well‑crafted ads could find a welcoming niche within the medium.
The argument for a modest "ads‑for‑games" model is more compelling than many anticipate, and it is already partially validated by the success of linear media. Services such as Netflix, Disney+, and other streaming platforms have demonstrated that a hybrid approach—offering both ad‑free and ad‑supported tiers—can generate substantial revenue while keeping a broad subscriber base. Should Xbox’s experiment prove viable, it would not only preserve its paying subscribers but also unlock a fresh, previously untapped income stream at a moment when the brand could greatly benefit from additional cash flow.
This development matters because console gaming is increasingly positioning itself as a premium experience. The price tags attached to new games, consoles, accessories, and downloadable content keep rising, creating a financial barrier for the average player.
When Xbox announced its plans, it explicitly noted that, if executed correctly, advertising could lower the cost of entry for gamers. The mobile gaming sector already offers a clear precedent: ad‑supported tiers allow players to engage with games without paying large upfront fees, thereby expanding the market and attracting users who might otherwise stay away. Xbox hopes to replicate that model on consoles, offering a choice between a subscription‑free, ad‑supported experience and a paid, ad‑free alternative. By providing a two‑tier system, the company aims to keep its loyal fan base while simultaneously making games more accessible to newcomers.
Although no formal survey data on Xbox’s new approach has been published yet, it is reasonable to assume that the majority of gamers would tolerate a 30‑second commercial if it meant they could play a beloved or brand‑new title for an hour without paying extra. Xbox’s internal data likely supports this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that in‑game advertisements consistently outshine TV, social, and standard online ads in terms of 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—placing ads just before a game launches rather than embedding them within the gameplay itself—adds another layer of advantage. Our data indicate that these pre‑game placements achieve higher recall and attribution scores compared with intrinsic in‑game slots.
The distinction is crucial. While we often remember commercials that appear on television or in our social feeds, we don’t always connect those impressions to specific brands. 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 revenue models.
It is also important to note that Xbox’s ads are not woven into the gameplay; they appear before the session starts. Traditional in‑game formats tend to excel further down the funnel, boosting brand‑image lift, consideration, interest, and overall likability.
A hybrid approach that combines pre‑game and in‑game ads could theoretically offer the best of both worlds for advertisers, though it might also provoke greater resistance from players who value an uninterrupted experience. Xbox has promised that the advertisements will be non‑intrusive.
By confining ads to the pre‑game window, the company aims to preserve the immersive nature of the actual play session. This consideration benefits both the gamer—who can dive straight into the action—and the advertiser, who wants their message to be part of the experience rather than a disruption. Relevance will be another key factor.
Nobody wants to see a promotion for cat food when they don’t own a cat, or an ad for a game they have already completed. By delivering contextual, well‑targeted ads, Xbox can keep players from abandoning the service while giving brands an effective platform to reach new audiences.
Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to the presence of ads at all; the second is whether the revenue generated will be sufficient to sustain the model over the long term.
The decision to explore ad‑supported streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has shown a willingness to experiment with new business models. Only time will reveal whether this gamble pays off.
Historically, our work in gaming advertising has centered on “watch an ad, earn an extra life” mechanics. Xbox’s proposal is different: it asks players to view an ad in order to access a game they already own.
Our existing data set does not yet tell us how this will be received. Related research on ad‑format perception—where participants who recall an ad are asked to select positive descriptors—has consistently highlighted “non‑intrusive” and “immersive” as top‑rated attributes. If Xbox and future adopters want to make advertising a lasting fixture in gaming, they will need to focus closely on these two qualities.
My forecast is that Xbox will neither be the first nor the last platform to test such a model. Advertising in games has existed for 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 other gaming companies and, more importantly, make video games considerably more affordable for everyday players.