Virginie Chesnais serves as Chief Marketing Officer at Happydemics, an ad‑tech analytics firm. For many years, gamers have approached in‑game advertising with suspicion, and their concerns are not unfounded. The reputation of ads in video games is mixed; players often encounter redirects to unrelated sites, misleading content, or closing buttons that are difficult to locate, all of which generate frustration.
A recent study conducted by eMarketer highlighted that 52 percent of gamers would abandon a session if they ran into multiple intrusive ad elements. Losing half of an audience at the very moment you try to engage them is hardly an effective approach.
Yet, advertisements do not have to be a detriment. The same research revealed that one in five gamers would actually increase the frequency with which they play a title if the in‑game ads were of a high quality and felt relevant. With Xbox currently piloting an ad‑supported game‑streaming service, and with the overall expense of gaming climbing steadily, premium‑grade advertising could find a natural home in the console ecosystem. The rationale for introducing an ad‑for‑games model is more compelling than many anticipate, especially when we look at the success of linear media platforms.
Services such as Netflix, Disney+, and other streaming giants have demonstrated that a mixed revenue model—combining subscription fees with ad‑supported tiers—can be highly profitable. Should Xbox’s experiment prove viable, it would not only preserve its paying subscriber base but also unlock a fresh, previously untapped revenue stream at a moment when the brand could use additional cash flow.
This development matters because console gaming is increasingly being positioned as a premium experience. The price tags on new releases, hardware, accessories, and downloadable content continue to rise, creating a financial barrier for the average player.
Xbox itself has stated that, when executed correctly, advertising can lower the cost of entry for gamers. Mobile gaming already offers a precedent: ad‑supported tiers allow players to enjoy games without the need for large upfront purchases, expanding the market to users who might otherwise be excluded. It is also crucial to note that any ad‑based option would be entirely optional. Players who prefer an uninterrupted experience could continue to pay the subscription fee, while those who are open to watching ads could enjoy reduced costs.
By offering a two‑tier system, Xbox aims to keep its loyal fan base satisfied while simultaneously making games more accessible to newcomers. Although there is no concrete survey data on this particular rollout yet, it is reasonable to assume that the majority of gamers would tolerate a 30‑second advertisement if it granted them an hour of gameplay on a favorite or newly released title. Xbox likely has internal data supporting this hypothesis.
Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that in‑game advertising consistently outperforms TV, social, and other online formats in terms of recall and attribution. Players tend to remember ads that appear within a gaming environment and can correctly associate them with the sponsoring brand.
Moreover, the company’s data indicate that “around‑the‑game” placements—ads shown before the game launches rather than embedded within the gameplay—deliver an even stronger advantage for recall and attribution when compared with traditional in‑game slots. The distinction is important because, while we may notice advertisements while watching television or scrolling through social feeds, those impressions do not always translate into a clear brand connection. Gaming appears to occupy a unique position on this metric, which may explain why Xbox and other publishers such as EA are increasingly exploring ad‑based models.
It is worth emphasizing that Xbox’s ads are intended to be pre‑game, not intrusive during play. Pre‑game ads avoid breaking immersion, preserving the core experience for players while still delivering brand messages.
For advertisers, this format offers the benefit of reaching a highly engaged audience without the risk of disrupting gameplay. Relevance will be key. No gamer wants to see an advertisement for cat food when they have no feline companion, or for a game they have already completed. Contextual, well‑targeted ads will help ensure that players do not abandon a session at the first sign of advertising, while giving brands a premium platform to reach new demographics.
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 move toward ad‑supported streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who appears willing to experiment with new monetisation strategies.
Historically, many gaming ad programs have been built around “watch an ad, earn an extra life” mechanics. Xbox’s proposal differs: it asks players to watch an ad simply to access a game they already own. Existing data do not yet reveal how this will be received. However, research on ad‑format perception consistently shows that descriptors such as “non‑intrusive” and “immersive” rank among the most favorable.
If Xbox—and potentially other companies—can deliver ads that meet these criteria, they will likely see higher acceptance. My forecast is that Xbox will not be the sole pioneer in this space; other studios and platforms will soon experiment with similar approaches.
Advertising has been part of gaming for years, but rarely with the player’s experience as the primary focus. Should Xbox manage to strike the right balance, it could pave the way for broader adoption across the industry, ultimately making video games more affordable and accessible for everyday gamers.