Virginie Chesnais serves as Chief Marketing Officer at Happydemics, a platform that analyses ad‑tech performance. For many years, gamers have approached in‑game advertising with suspicion, and the wariness is understandable. The reputation of ads in games has been tarnished by experiences such as redirects to unrelated sites, misleading content, and the inability to locate a close button, all of which have generated frustration among players. A recent study by eMarketer highlighted that 52 percent of gamers would abandon a session if they encountered multiple intrusive ad elements.
Losing half of your audience at the very moment you are trying to engage them is hardly a winning tactic. However, advertising does not have to be a negative experience.
The same research revealed that one in five gamers would actually increase the frequency with which they play a title if the in‑game advertisements were of high quality and relevance. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming continuing to climb, there is a genuine opportunity for well‑executed ads to find a comfortable niche within the gaming ecosystem.
The rationale for introducing a modest advertising model into games is more compelling than many assume, and it is already validated to some extent by the success of linear media. Services such as Netflix, Disney+, and other streaming platforms have demonstrated that offering both ad‑free and ad‑supported tiers can generate substantial revenue while still delivering a consistent product. Should Xbox’s experiment prove viable, it could not only preserve its subscription base but also unlock a fresh, previously untapped income stream at a moment when the company is eager for additional cash flow.
This development matters because console gaming is increasingly being positioned as a premium offering. Prices for games, consoles, peripherals, and downloadable content keep rising, 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 help lower the cost of accessing games.
The mobile‑gaming sector already shows that ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases, allowing them to experience a game in exchange for watching short commercials. Crucially, this model would be entirely optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those who are comfortable with occasional ads could enjoy a reduced‑price or free tier. By offering a two‑tier system, Xbox hopes to retain its loyal fan base while simultaneously expanding accessibility for newcomers.
Although there is no specific survey data on Xbox’s new approach yet, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second advertisement if it meant gaining an hour of playtime on a beloved or newly released 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 indicate that in‑game advertisements consistently outperform TV, social, 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 game launches rather than embedded within the gameplay—becomes particularly intriguing. Our research shows that pre‑game placements have a distinct advantage in terms of recall and attribution when compared with ads that appear directly inside the game world. The distinction matters because while we may notice ads while watching television or scrolling through social feeds, those impressions do not always translate into brand awareness.
Gaming appears to sit in a league of its own for these metrics, which likely explains why companies such as Xbox and EA are increasingly exploring ad‑based revenue models. It is also important to note that Xbox’s ads are not meant to be intrusive. By placing commercials before the gameplay begins, the company aims to preserve the immersive experience once the player is inside the virtual world.
This approach benefits both gamers—who avoid interruptions during play—and advertisers, who want their messages to be part of a seamless experience rather than a disruptive nuisance. Relevance will be key. Nobody wants to see an advertisement for cat food if they don’t own a cat, or a promo for a game they have already completed. Contextual, well‑targeted ads can keep players from abandoning a session at the first sign of a commercial, while simultaneously giving brands a highly engaged audience.
Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to pre‑game ads; the second is whether the revenue generated will be sufficient to sustain the model over the long term. The move toward ad‑supported streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has shown a willingness to experiment with new business models. Only time will reveal whether this gamble pays off.
Historically, many gaming ad campaigns have followed a “watch an ad, earn an extra life” structure. Xbox’s proposition differs: players would watch an ad to gain access to a game they already own. Our existing data set does not yet indicate how this particular trade‑off will be received. Research on ad format perception does provide some optimism.
When participants who remembered an ad were asked to describe the format, terms like “non‑intrusive” and “immersive” ranked among the most positive descriptors. If Xbox—and potentially other platforms in the future—aim to make gaming ads successful, these two qualities will be essential metrics to monitor. My forecast is that Xbox will neither be the first nor the last company to experiment with this model.
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 open the door for similar initiatives across the industry and make video games considerably more affordable for everyday gamers.