Virginie Chesnais serves as chief marketing officer at the ad‑technology analytics firm Happydemics. For many years, gamers have been skeptical of advertisements that appear within games, and their concerns are not unfounded.
The reputation of in‑game ads is mixed, often because they redirect users to external sites or apps, present misleading content, or feature hard‑to‑find close buttons that frustrate players. A recent study from eMarketers highlighted that 52 % of respondents would stop playing if they encountered multiple intrusive ad elements. Losing half of an audience at the moment you’re trying to engage them is clearly not an effective approach. However, advertisements do not have to be a negative experience.
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 currently piloting an ad‑supported game‑streaming service and the overall cost of gaming steadily climbing, well‑crafted ads could find a welcoming home in the console ecosystem.
The argument for a hybrid "ads‑for‑games" model is stronger than many assume, as linear media have already demonstrated. Platforms such as Netflix, Disney+, and other streaming services have proven that offering both ad‑free and ad‑supported tiers can generate substantial revenue while keeping a broad audience. Should Xbox’s experiment succeed, it could not only preserve its subscription base but also unlock a previously untapped income stream at a moment when the brand is seeking fresh financial levers.
This is increasingly important because console gaming is evolving into a premium service. Prices for games, consoles, accessories, and downloadable content continue to rise, making it harder for the average consumer to justify the expense and creating a barrier to entry for casual gamers.
Xbox itself has stated that, when executed correctly, advertising can reduce the cost of accessing games. The mobile‑gaming sector already shows that ad‑supported tiers allow players to join the ecosystem without paying large upfront fees, opening the door for a more inclusive market.
Crucially, the model remains optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee, while those who are comfortable with occasional ads can enjoy a lower‑cost option. By offering a two‑tier system, Xbox hopes to keep its loyal fan base while simultaneously attracting newcomers who might otherwise be deterred by price. Although concrete survey data on this specific rollout are not yet available, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second commercial if it meant they could play a beloved title or a brand‑new game for an hour.
Xbox’s own analytics are likely to confirm this hypothesis. Happydemics data from 285 in‑game campaigns across the UK and North America reveal that in‑game advertisements consistently outperform TV, social, and standard online ads in terms of recall and attribution. Players are more likely to remember an ad they see while gaming and to correctly associate it with the sponsoring brand.
Xbox’s “around‑the‑game” approach—ads displayed before the gameplay begins rather than embedded within the game world—adds another layer of interest. Our research shows that these pre‑game formats achieve higher recall and attribution scores compared with intrinsic in‑game placements. The distinction matters because while we can often recall ads seen on television or scrolling through a feed, we do not always link them to the correct brand.
Gaming appears to operate in its own league for this metric, which may explain why companies like Xbox and EA are increasingly exploring ad‑based gaming models. It is also important to note that Xbox’s ads are pre‑game, not in‑game. Traditional in‑game formats tend to excel further down the funnel, delivering stronger lifts in brand image, consideration, interest, and likeability. A combination of pre‑game and in‑game ads could theoretically offer advertisers the best of both worlds, though it might also provoke greater pushback from players who value an uninterrupted experience.
Xbox has promised that the ads will be non‑intrusive. By placing commercials before the game starts, the immersive experience remains intact, which benefits both the player and the advertiser.
Advertisers want their messages to be part of the experience, not a distraction. Relevance will be key. Nobody wants to see an advertisement for cat food when they don’t own a cat, or a promotion for a game they have already completed.
Contextual, well‑targeted ads will help ensure players do not abandon the session at the sight of a commercial, while giving brands a high‑impact platform to reach new audiences. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how gamers will react to this new ad format; the second is whether the revenue generated will justify making it a permanent feature. The move toward ad‑supported 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 the strategy delivers the intended results.
Historically, many gaming ad models have been built around "watch an ad, get an extra life" incentives. Xbox’s proposal is different: it asks players to watch an ad to access a game they already own. Our existing data set does not yet indicate how this will be received. Research on ad‑format perception—where respondents who recall an ad are asked to describe the format—shows that "non‑intrusive" and "immersive" are among the most favored descriptors.
If Xbox, and potentially other platforms in the future, hope to make gaming ads successful, these two attributes will need close monitoring. My forecast is that Xbox will not be the first nor the last to experiment with such strategies. Advertising in games has existed for years, but rarely with the player’s experience at the forefront. Should Xbox succeed, it could pave the way for other gaming companies to adopt similar models, ultimately making video games more accessible to everyday players.