Virginie Chesnais serves as chief marketing officer at Happydemics, an analytics platform for advertising technology. For years, many gamers have looked at in‑game advertising with suspicion, and their wariness is understandable. The reputation of ads in video games is mixed at best: users often encounter redirects to unrelated sites or apps, deceptive messaging, and close buttons that are difficult to locate, all of which contribute to a frustrating experience.
A recent study conducted by eMarketer highlighted the severity of the problem, revealing that 52 % of players would abandon a title after encountering several disruptive advertising elements. Losing half of an audience at the very moment you are trying to engage them is hardly an effective approach. Nevertheless, advertisements do not have to be a nuisance.
The same research indicated that one in five gamers would actually increase the frequency with which they play a game if the in‑game ads were of a high quality and seamlessly integrated. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming continuing to climb, well‑crafted ads could find a welcoming niche within the medium. The argument for incorporating a modest advertising component into games is more compelling than many assume, and it has already been demonstrated to some extent by linear media. Services such as Netflix, Disney+ and other streaming platforms have shown that a dual‑tier model—offering both a premium, ad‑free subscription and a lower‑cost, ad‑supported tier—can generate significant revenue while expanding the audience base.
Should Xbox’s experiment prove successful, it would not only preserve its existing subscriber base but also unlock a fresh, previously untapped source of income at a moment when the brand is eager for additional cash flow. This development matters because console gaming is increasingly positioning itself as a premium entertainment service. The price tags attached to new consoles, games, accessories, and downloadable content are steadily rising, 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 lower the cost of entry to gaming. The mobile‑gaming sector already illustrates this point: ad‑supported tiers allow players to experience games without paying a large upfront fee, thereby widening the market.
Importantly, any advertising model Xbox introduces would be optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those willing to view ads could enjoy a reduced‑price or even free access. By offering a two‑tier system, Xbox hopes to keep its loyal fanbase happy while simultaneously making games more approachable for newcomers. Although no formal survey data on this particular launch exists yet, it is reasonable to assume that the majority of gamers would tolerate a short 30‑second commercial if it meant gaining an hour of gameplay on a beloved or brand‑new title.
Xbox’s own analytics are likely to confirm this hypothesis. Happydemics data drawn from 285 in‑game campaigns across the United Kingdom and North America demonstrate that in‑game advertisements consistently out‑perform television, social‑media, and other online formats when it comes to ad recall and attribution. In other words, gamers are more likely to remember an ad they see while playing and correctly associate it with the sponsoring brand. This is where Xbox’s “around‑the‑game” strategy—ads displayed before the gameplay begins rather than embedded within the game world—becomes intriguing.
Our research indicates that pre‑game placements achieve higher recall and attribution scores compared with intrinsic in‑game placements. The distinction matters because, while we can often remember a commercial that pops up during a TV break or a sponsored post on a social feed, that memory does not always translate into a clear link to the brand behind it.
Gaming appears to occupy a unique position in this regard, which likely explains why companies such as Xbox and EA are increasingly exploring ad‑based models. It is also essential to note that Xbox’s ads are not meant to interrupt the actual gameplay; they will appear before the session starts.
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 both pre‑game and in‑game ads could, in theory, give advertisers the best of both worlds, though it might also provoke greater resistance from players.
Xbox has pledged that any advertisements will be non‑intrusive. By confining ads to the pre‑game window, the company aims to preserve the immersive nature of the experience.
This approach benefits both players—who avoid interruptions during play—and advertisers, who want their messages to be part of a seamless experience rather than a disruptive annoyance. Relevance will be another critical factor. 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, well‑targeted ads that make sense for the individual player will help prevent premature exits and provide brands with a premium channel to reach new audiences.
Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to this new ad format; the second is whether the revenue generated will be sufficient to sustain the model over the long term.
The decision to explore ad‑supported streaming reflects the boldness of Xbox CEO Asha Sharma, who has shown a willingness to experiment and take calculated risks. Whether the strategy ultimately pays off remains to be seen.
Historically, many of our gaming‑ad projects have revolved around “watch an ad, earn an extra life” mechanics. Xbox’s proposal is different: it asks players to watch an ad in order to access a game they already own. Our existing data set does not yet reveal how this will be received.
However, broader research on ad‑format perception indicates that when respondents are asked to describe ads they remember positively, terms like “non‑intrusive” and “immersive” frequently appear among the top descriptors. If Xbox—and potentially other platforms in the future—aim to make advertising a lasting component of gaming, these two attributes will be essential metrics to monitor. In my view, Xbox will neither be the first nor the last company to test such a model. Advertising has been part of gaming for a long time, but rarely with the player’s experience at the forefront.
Should Xbox manage to strike the right balance, it could pave the way for similar initiatives across the industry, ultimately making video games more affordable and accessible for everyday gamers.