Virginie Chesnais serves as the chief marketing officer at Happydemics, an analytics platform that focuses on advertising technology. For many years, gamers have approached in‑game advertising with skepticism, and their concerns are not unfounded. The reputation of ads in video games is mixed, often plagued by issues such as redirects to unrelated websites or apps, misleading content, and obscure or missing close buttons that frustrate users. A recent study conducted by eMarketer highlighted that 52 % of gamers would abandon a title if they encountered several intrusive advertising elements.
Losing half of your potential audience at the very moment you are trying to engage them is hardly an effective strategy. Nevertheless, advertisements do 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 ads were of high quality and well‑executed.
This insight arrives at a time when Xbox is piloting an ad‑supported game‑streaming service, and the overall cost of playing continues to climb. High‑caliber ads could therefore find a receptive home within the gaming ecosystem.
The rationale for introducing an ad‑for‑games model is more compelling than many anticipate, especially when we look at the success of linear media. Streaming platforms such as Netflix, Disney+, and others have demonstrated that offering a tier with advertisements can generate substantial revenue while still delivering a consistent service.
Should Xbox’s experiment prove viable, the company would not only preserve its existing subscription base but also unlock a fresh, previously untapped stream of income—a development the brand urgently needs. The significance of this move lies in the fact that console gaming is increasingly being positioned as a premium product. Prices for games, consoles, accessories, and downloadable content are all on an upward trajectory, creating a financial barrier for the average player. Xbox itself has stated that, when executed correctly, advertising can lower the barrier to entry and make gaming more affordable for a broader audience.
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. By offering a similar option on consoles, Xbox hopes to broaden its reach.
Importantly, the advertising model would be entirely optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads.
This two‑tier approach aims to retain loyal fans while simultaneously inviting newcomers who might be deterred by high costs. Although there is no specific survey data on Xbox’s latest announcement, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second commercial if it granted them an hour of gameplay in a beloved or new title. Xbox’s internal data likely supports this hypothesis.
Happydemics has analyzed 285 in‑game campaigns across the United Kingdom and North America and found that in‑game advertisements consistently outperform TV, social, and other online formats when it comes to recall and attribution. In other words, players are more likely to remember an ad they saw while gaming and correctly associate it with the brand that displayed it. Xbox’s “around‑the‑game” strategy—placing ads before the gameplay begins rather than embedding them within the game world—adds another layer to this picture.
Our data indicate that pre‑game placements generate stronger recall and attribution than intrinsic in‑game spots. This distinction matters because, while we can often recall ads we see on television or scrolling through social feeds, those memories do not always translate into brand recognition. Gaming appears to occupy a unique position in this regard, which may explain why companies like Xbox and EA are increasingly exploring ad‑based models. It is crucial to note that Xbox’s ads are not in‑game; they are shown before the game starts.
Traditional in‑game formats tend to excel further down the conversion funnel, delivering higher lifts in brand image, consideration, interest, and likeability. A hybrid approach that combines pre‑game and in‑game ads could offer advertisers the best of both worlds, though it might also provoke greater resistance from players. Xbox has promised that the ads will be non‑intrusive. By delivering commercials before the actual gameplay, the company aims to preserve the immersive experience that gamers value.
This approach benefits both the player—who avoids interruptions during play—and the advertiser, who wants the campaign to feel like a seamless part of the overall experience rather than a disruptive nuisance. Relevance will be key.
No gamer wants to see an advertisement 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 in the moment will help keep players from abandoning the session and will give brands a premium platform to reach new audiences. Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to pre‑game advertising; 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 take calculated risks and experiment with new ideas. Time will reveal whether this gamble pays off. Historically, many gaming ad campaigns have relied on a “watch an ad, earn an extra life” mechanic. Xbox’s proposal is different: it asks players to watch an ad in order to access a game they already own.
Our current dataset does not provide a clear answer on how this will be received. However, research on ad‑format perception consistently shows that descriptors such as “non‑intrusive” and “immersive” rank among the most favored.
If Xbox—and potentially other platforms in the future—aim to make advertising a lasting component of gaming, these two qualities will be essential metrics to monitor. My forecast is that Xbox will neither be the first nor the last to experiment with this model.
Advertising has been part of gaming for years, but rarely with the player experience as the primary focus. Should Xbox succeed, it could pave the way for other developers and publishers to adopt similar strategies, ultimately making video games more accessible to everyday gamers.