Virginie Chesnais serves as Chief Marketing Officer at Happydemics, an analytics platform focused on advertising technology. For many years, gamers have looked at in‑game advertising with suspicion, and there are good reasons for that wariness. Historically, ads embedded in games have earned a mixed reputation: they often redirect users to unrelated websites or apps, sometimes present misleading content, and frequently lack obvious ways to close them, leading to frustration.
A recent study conducted by eMarketer highlighted that 52 % of players would abandon a game if they encountered several intrusive ad elements. Losing half of an audience at the moment you are trying to engage them is hardly an effective tactic.
However, advertising does not have to be a negative experience. The same research revealed that one in five gamers would actually play a title more often if the advertisements were high‑quality and well integrated. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming continuing to climb, there is a genuine opportunity for premium‑grade ads to find a comfortable niche within the medium.
The argument for a modest, ad‑backed model in gaming is more compelling than many anticipate, and it is already supported by evidence from linear media. Platforms such as Netflix, Disney+, and other streaming services have demonstrated that offering both subscription‑only and ad‑supported tiers can generate substantial revenue while expanding the audience base. Should Xbox’s experiment prove successful, it would not only preserve its existing paying subscriber base but also unlock a completely new revenue stream—something the brand could certainly use at this stage. This is significant because console gaming is increasingly being positioned as a premium offering.
Prices for new consoles, games, accessories, and downloadable content have risen steadily, making it harder for the average consumer to justify the expense and creating a barrier for casual or budget‑conscious gamers. Xbox itself has stated that, when executed correctly, advertising can help lower the cost of entry to gaming. The mobile‑gaming sector already shows that ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases, allowing them to experience games for free or at a reduced price in exchange for watching ads. Crucially, any advertising model would be optional.
Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads, while those who are comfortable with occasional commercials could enjoy a lower‑cost or even free tier. By offering a two‑tier system, Xbox hopes to keep its loyal fan base happy while simultaneously making its ecosystem more accessible to newcomers. Although there is no specific survey data on this particular launch yet, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second advertisement if it meant they could play a favorite title or a new release for an hour without paying extra. Xbox likely has internal data that supports this assumption.
Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America indicates that in‑game advertisements consistently outperform TV, social, and other digital formats when it comes to ad recall and attribution. In other words, players are more likely to remember an ad they saw while gaming and correctly associate it with the brand that displayed it.
Xbox’s “around‑the‑game” approach—showing ads before the game begins rather than embedding them within the gameplay—adds another layer of interest. Our data suggest that these pre‑game placements achieve higher recall and attribution scores 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, those memories do not always translate into a clear brand association. Gaming appears to be in a league of its own for this metric, which may explain why companies like Xbox and EA are increasingly exploring ad‑based revenue models.
It is also worth noting that Xbox’s ads are intended to be pre‑game, not intragame. Traditional in‑game ad formats tend to excel further down the marketing funnel, driving stronger brand‑image uplift, consideration, interest, and likeability. Combining both pre‑game and in‑game ads could theoretically give advertisers the best of both worlds, but it also raises the risk of player pushback if the experience feels too commercial.
Xbox has pledged that its advertisements will not be intrusive. By placing ads before the gameplay starts, the company aims 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 be part of the experience rather than a disruptive nuisance. Relevance will be key.
Nobody wants to see an ad for cat food when they don’t own a cat, or a promotion for a game they have already completed. By delivering contextual, well‑targeted ads, Xbox can keep players from abandoning a session while giving brands an effective platform to reach new audiences. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how players will react to pre‑game advertising; the second is whether the ad revenue will be sufficient to justify a long‑term strategy. The decision to explore ad‑supported game streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has shown a willingness to experiment with new business models. Only time will reveal whether this gamble pays off.
Historically, many of our gaming‑ad campaigns have relied on a “watch an ad, earn an extra life” model. Xbox’s proposal differs: players would watch an ad to gain access to a game they already own, rather than earning a reward.
Our existing data set does not yet indicate how this will be received. Related research on ad‑format perception shows that when participants recall an ad, they often describe the format as “non‑intrusive” and “immersive” – two descriptors that ranked among the most favorable.
If Xbox and future adopters aim to make advertising a sustainable part of gaming, these two attributes will be critical 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 rarely with the player experience as the central focus.
Should Xbox succeed, it could pave the way for other gaming companies to adopt similar strategies, ultimately making video games more affordable and accessible for everyday players.