Virginie Chesnais serves as chief marketing officer at the ad‑technology analytics firm Happydemics. While many gamers have historically been skeptical of advertisements embedded within games, their wariness is not unfounded.
In‑game ads have earned a mixed reputation, often because they redirect users to unrelated websites or apps, present misleading content, or hide the close button in a way that makes it nearly impossible to dismiss. A recent study by eMarketer highlighted that 52 percent of gamers would abandon a session if they encountered multiple intrusive ad elements, indicating that losing half of an audience at the moment of engagement is far from an optimal strategy. Nevertheless, advertising does not have to be a negative experience. The same research revealed that one in five players would actually increase the frequency with which they play a title if the in‑game advertisements were of a high quality and seamlessly integrated.
This insight arrives at a time when Xbox is piloting a new ad‑supported game‑streaming service, and the overall cost of gaming continues to climb. High‑caliber ads could therefore find a welcoming niche within the gaming ecosystem. The argument for a hybrid "ads‑for‑games" model is stronger 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 offering both ad‑free and ad‑supported tiers can generate substantial revenue while expanding the audience base.
If Xbox’s experiment proves viable, it could not only preserve its subscription revenue but also unlock an entirely new, previously untapped income stream—precisely the kind of financial boost the brand needs right now. This development matters because console gaming is increasingly being positioned as a premium product. Prices for games, consoles, accessories, and downloadable content have risen sharply, creating a financial barrier for the average consumer.
Xbox itself has stated that, when executed correctly, advertising can help lower the cost of entry to gaming. The mobile gaming sector already offers a precedent: ad‑supported tiers allow players to access games without paying large upfront fees, thereby widening the market. Importantly, participation in an ad‑supported tier would be entirely optional.
Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those willing to watch advertisements could enjoy a reduced price or even free access. By offering a two‑tier system, Xbox aims to retain its loyal fan base while simultaneously making games more approachable for newcomers. Although there is no specific survey data on Xbox’s latest announcement, it is reasonable to assume that most gamers would tolerate a brief 30‑second commercial if it meant gaining an hour of gameplay on a favorite or new title.
Happydemics’ analysis of 285 in‑game campaigns across the UK and North America supports this intuition: in‑game ads consistently outperformed TV, social, and other online formats in terms of recall and accurate brand attribution. In other words, players are more likely to remember an advertisement they see while playing a game and correctly associate it with the sponsoring brand.
Xbox’s “around‑the‑game” approach—showing ads before the game launches rather than during gameplay—adds another layer of appeal. Our data indicate that pre‑game placements achieve higher recall and attribution scores compared with ads that appear within the game environment itself.
This distinction matters because, while traditional media can be remembered, it does not always translate into a clear brand link. Gaming appears to excel in this metric, which likely explains why companies like EA and Xbox are increasingly exploring ad‑based models.
It is crucial to note that Xbox’s ads will be pre‑game, not intragame. In‑game ad formats tend to perform better further down the conversion funnel, boosting brand image, consideration, interest, and overall likability. A combined strategy that leverages both pre‑game and in‑game ads could offer advertisers the best of both worlds, though it might also provoke greater pushback from players who are sensitive to any interruption. Xbox has pledged that the advertisements will be non‑intrusive.
By placing ads before the gaming session begins, the company hopes to preserve the immersive experience that gamers cherish. This approach benefits both players—who enjoy uninterrupted gameplay—and advertisers, who want their messages to feel like a natural part of the experience rather than a disruptive interruption. Relevance will be key. No gamer wants to see an ad for cat food when they don’t own a cat, or for a game they have already completed.
Contextual, targeted advertising that aligns with a player’s interests will help keep users engaged and prevent them from abandoning the session at the first sign of an irrelevant commercial. Xbox is venturing into uncharted territory on two fronts: predicting player reactions to a new ad format and determining whether the revenue generated will be sufficient to sustain the model long‑term. The move reflects a willingness by Xbox CEO Asha Sharma to experiment and take calculated risks. Only time will reveal whether the strategy delivers the desired outcomes.
Historically, many gaming ad campaigns have relied on "watch an ad, get an extra life" mechanics. Xbox’s proposal differs: it asks players to watch an ad in order to access a game they already own. Our current data set does not provide a direct comparison for this scenario, leaving an open question about its effectiveness. Nevertheless, research on ad format perception shows that descriptors such as "non‑intrusive" and "immersive" rank among the most positively received attributes.
If Xbox—and potentially other platforms in the future—aim to make gaming ads successful, these two qualities will be essential metrics to monitor. In my view, Xbox will not be the first nor the last company to test this model. Advertising in games has existed for years, but it has often ignored the player experience.
Should Xbox manage to balance revenue generation with a respectful, player‑first approach, it could pave the way for similar initiatives across the industry and make video games significantly more accessible to everyday gamers.