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; players often encounter redirects to unrelated sites or apps, misleading content, or hide‑buttons that are difficult to locate, all of which contribute to a frustrating experience.
A recent study conducted by eMarketers revealed that 52 % of respondents would abandon a game if they ran into several intrusive advertising elements. Losing half of the audience at the very moment you are trying to engage them is hardly a winning tactic.
Nevertheless, advertising does not have to be a negative force. The same survey 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 climbing steadily, well‑crafted advertisements could find a receptive home within the medium.
The argument for a hybrid "ads‑for‑games" model is more compelling than many realize, and it has already been demonstrated to some extent by linear media platforms. Services such as Netflix, Disney+, and other streaming giants have proven that offering an ad‑supported tier alongside a premium, ad‑free subscription can generate significant revenue while expanding the audience.
Should Xbox’s experiment succeed, it would not only preserve its existing subscriber base but also unlock a previously untapped source of income at a moment when the brand could use it most. This development matters because console gaming is increasingly positioning itself as a premium product.
Prices for games, consoles, accessories, and downloadable content continue to rise, creating a financial hurdle for the average player. Xbox itself has stated that, when executed correctly, advertising can lower the barrier to entry for gamers. The mobile‑gaming sector already illustrates how ad‑supported tiers can invite new players into the ecosystem without demanding large upfront payments. Crucially, the approach remains optional.
Users who prefer an uninterrupted experience can continue to pay for a subscription that removes ads, while those who are comfortable with occasional commercials can enjoy a lower‑cost entry point. By offering a two‑tier system, Xbox aims to keep its loyal fan base happy while simultaneously attracting newcomers who might otherwise be priced out. Although concrete survey data on this particular initiative are not yet available, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second ad if it granted them an hour of playtime on a favorite or newly released title. Xbox likely has internal metrics that support this hypothesis.
Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that advertisements embedded within games consistently outperform TV, social, and standard online ads 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" strategy—ads displayed before the game launches rather than during gameplay—becomes especially intriguing.
Our data indicate that pre‑game placements achieve a distinct advantage in ad recall and brand attribution when compared with ads that appear directly inside the game world. The distinction matters because, while we can often recall ads seen on television or scrolling through social feeds, we do not always link those impressions to the correct brand.
Gaming appears to operate in its own league for this metric, which likely explains why companies such as Xbox and Electronic Arts are increasingly exploring ad‑based models. It is important to note, however, that Xbox’s ads are not in‑game; they are pre‑game. Traditional in‑game formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and likeability.
A hybrid approach that combines both pre‑game and in‑game ads could theoretically offer advertisers the best of both worlds, though it also raises the risk of greater player pushback. Xbox has promised that the advertisements will be non‑intrusive. By placing ads before the gaming session begins, the company aims to preserve the immersive experience once the player is actually inside the game. This consideration benefits both the audience—who can enjoy uninterrupted gameplay—and advertisers, who want their messages to complement rather than disrupt the experience.
Relevance will be another key factor. No gamer wants to see a commercial for cat food when they do not 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 high‑impact 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 the start of a session; 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 the boldness of Xbox CEO Asha Sharma, who has shown a willingness to experiment with unconventional strategies.
Only time will reveal whether this gamble pays off. Historically, many gaming ad campaigns have relied on "watch an ad, earn an extra life" mechanics. Xbox’s proposal, by contrast, 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.
Research on ad‑format perception—where participants who recall an ad are asked to describe the format using positive adjectives—has consistently highlighted "non‑intrusive" and "immersive" as top descriptors. If Xbox and future adopters aim to make advertising a lasting component of gaming, these two qualities will be essential metrics to monitor. In my view, Xbox will neither be the first nor the last company to test such a model. Advertising has been part of gaming for a long time, but rarely with the player experience as the primary focus.
Should Xbox manage to strike the right balance, it could pave the way for other developers and publishers to adopt similar strategies, ultimately making video games more affordable and accessible for everyday gamers.