Virginie Chesnais serves as chief marketing officer at Happydemics, an analytics platform focused on advertising technology. For many years, gamers have looked at in‑game advertising with suspicion, and the wariness is understandable. The reputation of ads in video games is mixed; players often encounter redirects to unrelated sites or apps, misleading content, or tiny close buttons that are hard to find, all of which generate frustration.
A recent study conducted by eMarketer revealed that 52 % of gamers would stop playing if they ran into several intrusive ad elements. Losing half of your audience at the very moment you’re trying to engage them is hardly a winning tactic. 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 high‑quality and well‑executed.
With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming steadily climbing, there is a genuine opportunity for premium‑grade ads to find a comfortable niche within the medium. The argument for a "ads‑for‑games" model is more compelling than many assume, and it has already been demonstrated to some extent by linear media platforms. Services such as Netflix, Disney+ and other streaming giants have shown that a hybrid approach—offering both ad‑free and ad‑supported tiers—can generate substantial revenue while keeping a broad audience.
Should Xbox’s experiment succeed, it would not only preserve its paying subscriber base but also unlock a brand‑new, previously untapped revenue stream at a moment when the company could use the extra cash. This development matters because console gaming is increasingly being positioned as a premium offering. Prices for games, consoles, accessories and downloadable content have risen to a point where many casual players find them difficult to justify, creating a barrier to entry for the everyday enthusiast.
Xbox itself has stated that, when executed correctly, advertising can lower the cost of accessing games. Mobile gaming already provides a clear illustration: ad‑supported tiers let players enjoy a game without paying a large upfront fee, instead watching short commercials in exchange for continued play.
Importantly, the model remains optional. Players who prefer an uninterrupted experience can still choose a paid subscription that removes ads.
By providing a two‑tier system, Xbox hopes to keep its loyal fan base while simultaneously making games more affordable for newcomers. Although no formal survey data exists yet on this specific rollout, it is reasonable to bet that a large majority of gamers would tolerate a 30‑second ad if it meant they could play one of their favorite titles—or a brand‑new game—for an hour. Xbox likely has internal data supporting that assumption. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America demonstrates that in‑game advertising consistently outperforms television, social media and standard online ads in terms of recall and attribution.
In other words, players are far more likely to remember an ad they see while gaming and to correctly associate it with the sponsoring brand. This is where Xbox’s "around‑the‑game" strategy—showing ads before the gameplay begins rather than embedding them within the game world—becomes intriguing.
Our data indicate that pre‑game placements generate a clear advantage in ad recall and accurate brand attribution when compared with ads that appear inside the game environment. The distinction matters because, while we can often recall ads that flash on a TV screen or appear in a social feed, those memories do not always translate into a clear link to the brand. Gaming appears to occupy a unique position in this respect, which may explain why companies like Xbox and EA are increasingly exploring ad‑based revenue models. It is also crucial to note that Xbox’s ads are not in‑game; they are pre‑game.
Traditional in‑game formats tend to excel further down the funnel, delivering stronger lifts in brand image, consideration, interest and overall likability. A hybrid approach—combining pre‑game and in‑game ads—could theoretically give advertisers the best of both worlds, though it also risks provoking greater pushback from players who are sensitive to ad frequency. Xbox has pledged that any ads will be non‑intrusive, a promise that is easy to understand.
By placing commercials before the game launches, the company aims to avoid breaking the immersive experience that gamers value. This approach benefits both players, who retain a seamless session, and advertisers, who want their messages to be part of the experience rather than a disruptive interruption. Relevance will be key. Nobody enjoys being served an advertisement for cat food when they don’t own a cat, or for a game they have already completed.
By delivering contextual, targeted ads that make sense for each player, Xbox can keep users from abandoning the session while giving brands a highly effective platform to reach fresh audiences. Nevertheless, Xbox is navigating uncharted waters. First, there is uncertainty about how gamers will react to pre‑game advertising; second, there is the question of 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.
Whether this gamble pays off remains to be seen. Historically, many gaming ad campaigns have been built around a "watch an ad, get an extra life" premise. Xbox’s proposal is different: players would watch an ad to gain access to a game they already own.
Our existing data set does not yet reveal how this particular exchange will be perceived. Related research on ad‑format perception—asking participants who recall an ad to select positive descriptors—has consistently highlighted "non‑intrusive" and "immersive" as top‑rated qualities.
If Xbox and future adopters aim to make gaming ads successful, these two metrics will be crucial to monitor. My forecast is that Xbox will neither be the first nor the last platform to experiment with this approach.
Advertising has been part of gaming for many years, but rarely with the player experience at the forefront. Should Xbox manage to strike the right balance, it could pave the way for other gaming companies to follow suit, ultimately making video games more accessible to the average consumer.