Virginie Chesnais serves as the chief marketing officer at the ad‑technology analytics firm Happydemics. For many years, gamers have viewed in‑game advertising with suspicion, and that wariness is understandable.
The reputation of ads in video games is mixed at best, with common complaints ranging from 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 percent of players would abandon a session if they encountered several disruptive advertising elements. Losing half of your audience at the moment you’re trying to engage them is hardly an effective approach.
However, advertisements do 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 ads were of high quality and well integrated. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming continuing to climb, premium‑grade ads could find a receptive home within the gaming ecosystem.
The argument for introducing a modest advertising model for games is more compelling than many anticipate, especially when we look at the success of linear media. Platforms such as Netflix, Disney+, and other streaming services have demonstrated that offering an ad‑supported tier alongside a paid subscription can generate substantial revenue while keeping a broad audience engaged. If Xbox’s experiment proves viable, it could not only preserve its existing subscriber base but also unlock a brand‑new revenue stream at a moment when the company is eager for fresh income sources.
This development matters because console gaming is increasingly being positioned as a premium service. Prices for games, consoles, accessories, and downloadable content are steadily rising, making it more difficult for the average consumer to justify the expense. This creates a barrier that prevents many potential players from entering the market.
Xbox itself has stated that, when executed correctly, advertising can lower the cost of entry to gaming. The mobile‑gaming sector already offers a clear example: ad‑supported tiers allow players to enjoy games without paying large upfront fees, opening the door for a wider audience. It is also crucial to note that any advertising model would be entirely 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 option. By providing a two‑tier system, Xbox hopes to retain its loyal fan base while simultaneously making games more accessible to newcomers.
Although there is no specific survey data on this particular announcement yet, it is reasonable to assume that most gamers would tolerate a brief 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 hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that in‑game advertisements consistently outperform TV, social, and other online formats when it comes to ad recall and attribution.
Players are far more likely to remember an ad that appears within a game and correctly associate it with the sponsoring brand. This is where Xbox’s “around‑the‑game” strategy—ads that appear before the game launches rather than within the gameplay itself—becomes intriguing. Our data indicate that these pre‑game placements achieve higher recall and attribution scores compared with intrinsic in‑game placements.
The distinction matters because, while we may recall ads seen on television or while scrolling through social feeds, those memories do not always translate into a clear brand connection. Gaming appears to occupy a unique space where ad recall is strongly linked to brand awareness, which likely explains why companies such as Xbox and EA are increasingly exploring ad‑based models. It is important to clarify that Xbox’s ads will not interrupt the actual gameplay; they will be shown before the session begins.
Traditional in‑game ad formats tend to excel further down the marketing funnel, delivering stronger lifts in brand image, consideration, interest, and likeability. A hybrid approach that combines pre‑game and in‑game ads could offer advertisers the best of both worlds, though it might also provoke greater resistance from players who dislike any form of advertising. Xbox has assured users that the advertisements will be non‑intrusive. By placing ads prior to the start of a game, the immersive experience remains untouched, which benefits both players and advertisers.
Advertisers want their messages to feel like a natural part of the experience rather than a disruptive interruption. Relevance will be key. No one 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, targeted ads that make sense for each player, Xbox can keep viewers engaged and give brands an effective platform for reaching new audiences.
Nevertheless, Xbox is venturing into uncharted territory. The first unknown is how gamers will react to pre‑game ads, and the second is whether the revenue generated will be sufficient to sustain the model over the long term. The move toward ad‑supported game streaming reflects the boldness of Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment and take calculated risks. Only time will reveal whether this strategy delivers the intended results.
Historically, many of our gaming‑ad projects have relied on a “watch an ad, earn an extra life” mechanic. Xbox’s proposal differs: players would watch an ad to access a game they already own, a scenario for which we currently lack direct data. Related research on ad‑format perception shows that when participants are asked to describe ads they remember, terms such as “non‑intrusive” and “immersive” rank among the most positive descriptors.
If Xbox and future industry players aim to make gaming ads successful, these two attributes will be critical metrics to monitor. My forecast is that Xbox will neither be the first nor the last platform to test this approach.
Advertising in 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 gaming companies to follow suit, ultimately making video games more affordable and reachable for the everyday gamer.