Virginie Chesnais serves as the chief marketing officer at Happydemics, an analytics platform that focuses on ad technology. For many years, gamers have looked at in‑game advertising with suspicion, and that wariness is understandable. The reputation of ads in video games is mixed at best; players often encounter redirects to unrelated sites or apps, misleading content, or dismiss buttons that are difficult to locate, all of which breed frustration. A recent study conducted by eMarketer revealed that 52 % of gamers would abandon a session if they ran into several disruptive advertising elements.
Losing half of an audience at the very moment you are 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 gaming steadily climbing, there is a real opportunity for well‑crafted ads to find a welcoming home within the gaming ecosystem.
The argument for integrating an "ads‑for‑games" model is more compelling than many assume, 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 model—offering both ad‑free and ad‑supported tiers—can generate substantial revenue while expanding the audience base. Should Xbox’s experiment succeed, it could not only preserve its existing subscriber base but also unlock a previously untapped revenue stream at a moment when the brand is looking for fresh income sources.
This development matters because console gaming is increasingly being positioned as a premium offering. Prices for games, consoles, accessories, and downloadable content continue to rise, making it harder for the average consumer to justify the expense. Xbox itself has acknowledged that, when executed correctly, advertising can help lower the barrier to entry for gamers. The mobile gaming sector already provides a clear example: ad‑supported tiers allow players to experience games without paying large upfront fees, thereby broadening the market.
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 watch ads could enjoy the same content at a reduced cost. By presenting a two‑tier system, Xbox hopes to keep its loyal fan base satisfied while simultaneously making games more accessible to newcomers.
Although there is no specific survey data on this particular announcement yet, it is reasonable to assume that a large majority of gamers would tolerate a brief 30‑second advertisement if it meant gaining an hour of gameplay in a favorite or newly released title. Xbox likely has internal data supporting this hypothesis. Happydemics has analyzed 285 in‑game advertising campaigns across the United Kingdom and North America, finding that in‑game ads consistently outshine television, social media, and other online formats when it comes to ad recall and attribution.
In other words, players are more likely to remember an ad they saw while playing and correctly associate it with the brand behind it. Xbox’s “around‑the‑game” strategy—showing ads before the gameplay begins rather than embedding them within the game world—adds another layer to this picture.
Our data indicate that pre‑game placements generate higher recall and attribution scores compared with ads that appear directly inside the game environment. This distinction matters because, while we may notice ads on TV or in a social feed, we do not always link those impressions to the associated brand. Gaming appears to occupy a unique space where ad recall is especially strong, which likely explains why companies such as Xbox and Electronic Arts are exploring ad‑based models more aggressively.
It is crucial to note that Xbox’s ads are not meant to interrupt the actual gameplay; they will be shown before the game starts. In‑game ad formats do have advantages further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and overall likeability.
A hybrid approach—combining pre‑game and in‑game ads—could theoretically provide the best of both worlds for advertisers, but it also risks heightened pushback from players who are sensitive to any form of interruption. Xbox has pledged that its advertisements will be non‑intrusive. By placing ads before the gaming session, the company aims to preserve the immersive experience that gamers value. This approach benefits both the player, who enjoys an uninterrupted session, and the advertiser, who wants their message to be part of the experience rather than a disruption.
Relevance will be key. No gamer wants to see a commercial for cat food when they don’t own a cat, or an advertisement for a game they have already completed.
By delivering contextual, well‑targeted ads, Xbox can keep players from abandoning the session while giving brands a highly 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, and the second is whether the revenue generated will be sufficient to sustain the model over the long term.
The decision to explore ad‑supported game streaming reflects the boldness of Xbox CEO Asha Sharma, who has shown a willingness to experiment and take calculated risks. Only time will reveal whether this strategy delivers the intended results. Historically, many gaming ad campaigns have relied on a "watch an ad, get an extra life" model.
Xbox’s proposal is different: it asks players to watch an ad 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 shows that when participants are asked to describe ads they remember, the terms "non‑intrusive" and "immersive" frequently emerge as the most positive descriptors.
If Xbox and future industry players want to make advertising in gaming a success, these two attributes will be crucial metrics to monitor. In my view, Xbox will neither be the first nor the last company to test this kind of approach. Advertising has been part of gaming for many years, but rarely with the player experience at the forefront.
Should Xbox manage to strike the right balance, it could pave the way for other game publishers to adopt similar models, ultimately making video games more affordable and accessible for everyday gamers.