Virginie Chesnais serves as the chief marketing officer at Happydemics, an analytics platform focused on advertising technology. For many years, gamers have approached in‑game advertising with suspicion, and the wariness is understandable. The reputation of ads in the gaming world is mixed at best; players often encounter redirects to unrelated websites or apps, misleading content, and hide‑away close buttons that are difficult to locate, leading to frustration.
A recent study by eMarketer highlighted that 52 % of gamers would abandon a session if they were bombarded with multiple intrusive ad elements. Losing half of your audience at the moment you are trying to engage them is hardly an effective tactic. Nevertheless, 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 steadily climbing, well‑crafted ads could find a receptive home in the medium. The argument for a hybrid "ads‑for‑games" model is stronger than many assume, and it has already been validated to a degree by linear media.
Services such as Netflix, Disney+, and other video platforms demonstrate that a stable subscription offering can coexist with an ad‑supported tier that generates additional revenue. Should Xbox’s experiment prove successful, it would not only preserve its paying subscriber base but also unlock a completely new revenue stream at a moment when the brand is in need of fresh income.
This development matters because console gaming is increasingly positioned as a premium experience. 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 for casual players. Xbox itself has stated that, when executed correctly, advertising can lower the cost of access to games. Mobile gaming has already shown that ad‑supported tiers can serve as an entry point for players who are unwilling or unable to make large upfront purchases.
Importantly, the system would be entirely optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee, while those willing to tolerate ads could enjoy the same content at a reduced price.
By offering a two‑tier structure, Xbox hopes to retain its loyal fan base while simultaneously making games more approachable for newcomers. Although there is currently no specific survey data on this particular announcement, it is reasonable to assume that most gamers would tolerate a 30‑second advertisement if it granted them an hour of playtime on a favorite or new 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 advertising consistently outperforms TV, social, and other online formats when it comes to ad recall and attribution.
Players are more likely to remember an ad they saw while playing and to correctly associate it with the brand that served it. This is where Xbox’s “around‑the‑game” approach—advertisements that appear before the game launches rather than within the gameplay itself—becomes compelling. Our data indicate that these pre‑game placements deliver a clear advantage in recall and attribution compared with ads embedded directly in the game environment. The distinction matters because, while we can often remember ads seen on television or scrolling through social feeds, that remembrance does not always translate into brand linkage.
Gaming appears to occupy a unique space where recall more readily leads to brand association, which likely explains why companies such as Xbox and EA are increasingly exploring ad‑based models. It is crucial to note that Xbox’s ads are not in‑game but pre‑game. Traditional in‑game formats tend to excel further down the funnel, driving improvements in brand‑image uplift, consideration, interest, and overall likability. A blended strategy that combines both pre‑game and in‑game ads could offer advertisers the best of both worlds, though it also risks heightened resistance from players.
Xbox has pledged that the ads will be non‑intrusive. By placing them before the gameplay begins, they avoid disrupting the immersive experience that players value. This approach benefits both gamers—who maintain their focus once the game starts—and advertisers, who want their messages to be part of the experience rather than a nuisance. Relevance will be key.
No one 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 can keep players from abandoning a session while giving brands a high‑impact platform 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 justify making it a permanent feature.
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 novel business models. Only time will reveal whether the strategy achieves its intended outcomes. Historically, many of our gaming‑ad projects have relied on a "watch an ad, get an extra life" model.
Xbox, however, is proposing that players 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 it—has consistently highlighted "non‑intrusive" and "immersive" as the most favored descriptors.
If Xbox and future adopters aim to make gaming ads successful, these two attributes will be critical performance indicators. My forecast is that Xbox will neither be the first nor the last platform to experiment with 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 companies to follow, ultimately making video games more accessible to the everyday gamer.