Virginie Chesnais serves as chief marketing officer at Happydemics, an ad‑technology analytics firm. For many years, gamers have looked at in‑game advertising with suspicion, and that wariness is understandable. The reputation of ads in video games is mixed; players often encounter redirects to external sites or apps, misleading content, or dismiss buttons that are difficult to locate, leading to frustration.
A recent study conducted by eMarketer revealed that 52 percent of gamers would stop playing if they ran into several disruptive advertising elements. Losing half of your audience at the moment you’re trying to engage them is hardly a winning strategy. However, advertisements do not have to be detrimental. The same research 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 presently piloting an ad‑supported game‑streaming service and the overall cost of playing continuing to climb, well‑crafted ads could find a natural fit within the gaming ecosystem. The argument for a modest, games‑focused advertising model is more compelling than many anticipate, and it is already partially validated by the success of linear media. Services such as Netflix, Disney+, and other streaming platforms demonstrate that a steady subscription revenue stream can be supplemented profitably by ad‑supported tiers. Should Xbox’s experiment prove effective, it could not only preserve its paying subscriber base but also unlock an entirely new revenue channel at a moment when the brand is in need of fresh income.
This is significant because console gaming is increasingly being positioned as a premium experience. The price tags attached to games, consoles, accessories, and downloadable content are becoming harder for the average consumer to justify, erecting a barrier that keeps many potential players at the sidelines.
Xbox itself has stated that, when executed correctly, advertising can lower the cost of entry to gaming. Mobile gaming already offers a precedent: ad‑supported tiers allow players to engage with games without the burden of large upfront purchases, opening the market to a broader audience. Crucially, the model remains optional.
Players who prefer an ad‑free experience can continue to enjoy it by paying a subscription fee. By offering a two‑tier system—ad‑supported and premium—Xbox aims to keep its loyal fan base while simultaneously making games more approachable for newcomers.
Although there is no specific survey data on this particular rollout yet, it is reasonable to assume that most gamers would tolerate a 30‑second advertisement if it granted them an hour of gameplay on a beloved or newly released title. 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 outshine TV, social, and other online formats in terms of ad recall and attribution.
In other words, players are more likely to remember and correctly associate the brand with the ad they saw while gaming. This is where Xbox’s “around‑the‑game” approach—ads displayed before the game launches rather than embedded within the gameplay—becomes intriguing.
Our data indicate that these pre‑game placements generate stronger recall and attribution compared with intrinsic in‑game spots. The distinction matters because, while we may remember ads that appear on television or social feeds, we do not always link those impressions to the correct brand. Gaming appears to occupy a unique position in this respect, which explains why companies like Xbox and EA are increasingly exploring ad‑based models.
It is important to note that Xbox’s ads are not in‑game; they appear pre‑game. Traditional in‑game ad formats tend to excel further down the marketing funnel, delivering higher lifts in brand image, consideration, interest, and overall likability. A hybrid strategy that combines both pre‑game and in‑game ads could theoretically offer the best of both worlds for advertisers, though it may also provoke greater resistance from players.
Xbox has pledged that the advertisements will be non‑intrusive. By placing ads before the gameplay begins, the company aims to preserve the immersive experience that gamers value. This approach benefits both the player—who enjoys uninterrupted play—and the advertiser, who wants the campaign to feel like a seamless part of the experience rather than a disruption.
Relevance will be key. No one wants to see a commercial for cat food if they don’t own a cat, or an advertisement for a game they have already completed.
By delivering contextual, targeted ads that make sense for the individual player, Xbox can minimize the risk of users abandoning the session while providing brands with a potent platform to reach fresh audiences. Nevertheless, Xbox is venturing into largely uncharted territory.
First, it must gauge how players will react to this new ad format; second, it must determine whether the revenue generated will justify making the model a permanent fixture. 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 innovative ideas.
Only time will reveal whether this strategy will meet its objectives. Historically, many of our gaming‑ad initiatives have revolved around “watch an ad, earn an extra life” mechanics. Xbox’s proposal, however, asks players to watch an ad merely to access a game they already own.
Our existing data set does not yet indicate how this will be received. Related research on ad‑format perception—where participants who recall an ad are asked to select positive descriptors—has highlighted “non‑intrusive” and “immersive” as the top two attributes.
If Xbox and future adopters aim to make advertising in games successful, these two metrics will need close monitoring. My forecast is that Xbox will neither be the first nor the last to experiment with such strategies. Advertising in video games has existed for many years, but it has not always 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 accessible and affordable for everyday players.