Virginie Chesnais serves as chief marketing officer at the ad‑technology analytics firm Happydemics. For years, many gamers have viewed in‑game advertising with suspicion, and their concerns are not unfounded.
The reputation of ads in video games is mixed at best, with frequent complaints about redirects to unrelated sites or apps, misleading content, and the inability to locate a close button quickly. A recent study from eMarketers highlighted that 52 % of players would abandon a session if they encountered several disruptive ad elements. Losing half of an audience at the moment you’re trying to engage them is hardly an effective tactic. Nevertheless, advertisements do not have to be a nuisance.
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 gaming continuing to climb, well‑crafted ads could find a welcoming niche within the medium.
The argument for a hybrid "ads‑for‑games" model is stronger than many assume, and it has already been demonstrated in the world of linear media. Services such as Netflix, Disney+ and other streaming platforms have proven that offering a lower‑price, ad‑supported tier can generate substantial revenue while keeping a broad subscriber base. Should Xbox’s experiment succeed, it would not only preserve its paying subscribers but also unlock a fresh, previously untapped revenue stream at a moment when the brand is seeking new financial levers. This development matters because console gaming is increasingly being positioned as a premium experience.
Prices for games, consoles, peripherals, and downloadable content keep rising, making it harder for the average player to justify the expense and creating a barrier to entry for casual gamers. Xbox itself has noted that, when executed correctly, advertising can reduce the cost of accessing games. 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, the model remains optional.
Players who prefer an uninterrupted experience can still opt for a paid subscription that removes ads. By offering a two‑tier system, Xbox hopes to keep its dedicated fan base while simultaneously opening the door for newcomers who might otherwise be priced out.
Although no formal survey data on this specific rollout exists yet, it is reasonable to assume that most gamers would tolerate a 30‑second commercial if it meant they could play a favorite or new title for an hour without paying extra. Xbox likely has internal data that supports this hypothesis. 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 to correctly associate it with the sponsoring brand. This is where Xbox’s “around‑the‑game” approach—ads displayed before the game starts rather than embedded within the gameplay—becomes compelling. Our data show that pre‑game placements enjoy a clear advantage in recall and attribution compared with intrinsic in‑game spots. The 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 occupy a unique space where recall more readily leads to brand association, which likely explains why companies like Xbox and EA are increasingly exploring ad‑based models. It is important to note that Xbox’s ads are not in‑game; they are pre‑game.
Traditional in‑game formats tend to excel further down the funnel, driving higher scores for brand‑image uplift, consideration, interest, and likeability. A blend of pre‑game and in‑game ads could theoretically give advertisers the best of both worlds, but it also raises the risk of player pushback. Xbox has pledged that the advertisements will be non‑intrusive. By placing ads before the gameplay begins, the company aims to preserve the immersive experience once the player is inside the game.
This approach benefits both gamers, who avoid interruptions during play, and advertisers, who want their messages to feel like a seamless part of the experience rather than a disruptive interruption. Relevance will be key. No one wants to see an ad for cat food if they don’t own a cat, or an advertisement for a game they have already completed.
By delivering contextual, purposeful ads, Xbox can keep players from abandoning the session while giving brands an effective platform to reach new audiences. Nonetheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to pre‑game advertising; the second is whether the revenue generated will be sufficient to sustain the model over the long term. The move toward ad‑supported game streaming reflects a bold strategy by Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment and take calculated risks.
Only time will reveal whether this gamble pays off. Historically, many gaming ad campaigns have relied on "watch an ad, get an extra life" mechanics. Xbox’s proposition differs: it asks players to watch an ad to access a game they already own. Our existing data set does not yet indicate how this will be received.
However, research on ad‑format perception shows that when participants are asked to describe ads they recall, terms like "non‑intrusive" and "immersive" frequently emerge as the most positive descriptors. If Xbox and future adopters aim to make advertising a lasting component of gaming, these two attributes will be crucial performance indicators. 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 companies to follow, ultimately making video games more affordable and accessible to the everyday gamer.