Virginie Chesnais serves as the Chief Marketing Officer at Happydemics, an analytics platform that specializes in advertising technology. For many years, the gaming community has viewed in‑game advertising with suspicion, and that wariness is understandable. The reputation of ads within games is often tarnished by issues such as redirects to unrelated websites or apps, misleading content, and the frustration of missing or hard‑to‑find close buttons.
A recent study conducted by eMarketer highlighted that 52 % of gamers would abandon a session if they encountered several intrusive ad elements, indicating that losing half of an audience at the moment of engagement is a poor strategic move. Nevertheless, advertising does not have to be a negative experience. The same survey revealed that one in five gamers would actually increase the frequency with which they play a title if the in‑game advertisements were of high quality and relevance.
This insight arrives at a time when Xbox is piloting a new ad‑supported game‑streaming service, and when the overall cost of gaming continues to climb. High‑caliber ads could therefore find a receptive home within the gaming ecosystem.
The argument for incorporating a modest advertising model into games is more compelling than many assume, and it is already partially validated by the success of linear media platforms. Services such as Netflix, Disney+, and other streaming giants have demonstrated that offering both ad‑free and ad‑supported tiers can generate significant revenue while maintaining a steady subscriber base. Should Xbox’s experiment prove viable, the company would not only preserve its paying audience through the existing subscription model but also unlock an entirely new revenue stream—something the brand could greatly benefit from given its current financial pressures.
This development matters because console gaming is increasingly being positioned as a premium offering. Prices for games, consoles, accessories, and downloadable content have risen steadily, creating a financial hurdle for the average player.
Xbox itself has acknowledged that, when executed correctly, advertising can lower the barrier to entry and make gaming more affordable. Mobile gaming already offers a precedent: ad‑supported tiers allow players to experience games without the need for large upfront purchases, expanding the market to users who might otherwise be excluded. Importantly, the proposed system would be optional.
Gamers who prefer an uninterrupted experience could continue to pay a subscription fee, while those who are open to watching ads could enjoy the same content at a reduced cost. By providing a dual‑track approach, Xbox aims to keep its loyal fan base satisfied while simultaneously attracting newcomers who might be deterred by high price points. Although there is currently no publicly available survey data specific to this announcement, it is reasonable to predict that a substantial majority of gamers would tolerate a brief 30‑second advertisement if it granted them an hour of gameplay in a favorite or new title.
Xbox’s internal research is likely to confirm this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America reveals that in‑game advertisements consistently outperform television, social media, and other online formats when it comes to recall and attribution.
In other words, players are more likely to remember an ad they encountered while gaming and correctly associate it with the sponsoring brand. Xbox’s “around‑the‑game” strategy—placing ads before the game launches rather than embedding them within the gameplay—adds another layer of advantage. Our data indicate that these pre‑game placements generate higher recall and attribution scores compared with ads that appear directly inside the game environment. This distinction matters because, while people can often recall ads seen on TV or scrolling through social feeds, they may not always link those impressions to the correct brand.
Gaming, by contrast, appears to create a stronger mental connection between the ad and its source, which may explain why companies such as EA and Xbox are increasingly exploring ad‑based models. It is crucial to note that Xbox’s advertisements will be pre‑game, not in‑game. Traditional in‑game formats tend to excel further down the marketing funnel, delivering stronger lifts in brand image, consideration, interest, and overall likability. A hybrid approach—combining both pre‑game and in‑game ads—could theoretically provide the best of both worlds for advertisers, though it also runs the risk of provoking greater resistance from players.
Xbox has assured users that the ads will be non‑intrusive. By delivering commercials before gameplay begins, the company hopes to preserve the immersive experience that gamers value.
This approach benefits both players, who avoid interruptions during play, and advertisers, who want their messages to complement rather than disrupt the user journey. Relevance will be another key factor. No gamer wants to see an advertisement for cat food when they don’t own a cat, or for a game they have already completed.
Contextual, targeted ads that make sense within a player’s interests will help prevent the “ad fatigue” that leads users to abandon a session. Nonetheless, Xbox is venturing into largely uncharted territory.
The first unknown is how players will react to a model that asks them to watch ads to access games they already own. The second unknown concerns the financial viability—will the ad revenue be sufficient to sustain this model as a long‑term offering?
The decision to explore ad‑supported streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with new business models. Time will tell whether this gamble pays off. Historically, many gaming ad campaigns have relied on a “watch an ad, earn an extra life” mechanic. Xbox’s proposal diverges by asking players to view an ad simply to launch a game they already possess.
Our existing data set does not yet reveal how this will be received. However, broader research on ad‑format perception shows that when participants are asked to describe ads they remember, terms like “non‑intrusive” and “immersive” frequently emerge as positive descriptors. If Xbox—and potentially other platforms—are to make gaming ads successful, they will need to prioritize these qualities.
My forecast is that Xbox will neither be the first nor the last company to trial such a model. Advertising within 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 publishers to adopt similar strategies, ultimately making video games more accessible and affordable for everyday gamers.