Virginie Chesnais serves as the chief marketing officer at Happydemics, an ad‑technology analytics firm. For many years, gamers have approached 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, misleading content, or dismiss buttons that are difficult to locate, all of which fuel frustration. A recent study by eMarketer highlighted that 52 % of gamers would stop playing if they were bombarded with multiple intrusive ads.
Losing half of an audience at the moment you are trying to engage them is hardly an effective tactic. However, advertising does not have to be a negative experience. The same research indicated that one in five players would actually increase the frequency with which they played a title if the ads were high‑quality and well‑integrated. Xbox is currently piloting an ad‑supported game‑streaming service at a time when the overall cost of gaming is climbing steadily.
In this context, premium‑grade advertisements could find a receptive home within the gaming ecosystem. The rationale for a hybrid "ads‑for‑games" model is more compelling than many might assume, and it has already been demonstrated in the world of linear media. Services such as Netflix, Disney+, and other streaming platforms have proven that offering both ad‑free and ad‑supported tiers can generate significant revenue while expanding the audience base.
Should Xbox’s experiment succeed, it would not only preserve its existing subscriber base but also unlock a fresh, previously untapped stream of income—a development the brand could greatly benefit from right now. The importance of this shift lies in the fact that console gaming is increasingly being positioned as a premium offering. Prices for games, consoles, accessories, and downloadable content continue to rise, creating a financial barrier for the average player.
Xbox itself has acknowledged that, when executed correctly, advertising can lower the cost of entry to gaming. Mobile gaming has already shown that ad‑supported tiers can give players a foothold in the market without demanding a large upfront payment. Crucially, the model is optional.
Gamers who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads, while those who are price‑sensitive can choose the ad‑supported route. By providing a two‑tier system, Xbox hopes to keep its loyal fanbase happy while simultaneously opening the door for newcomers. Although no specific survey data exists yet on this particular rollout, it is reasonable to assume that most gamers would tolerate a 30‑second commercial if it meant gaining an hour of gameplay on a favorite or newly released title.
Xbox likely has internal data supporting this hypothesis. Happydemics has analyzed 285 in‑game campaigns across the UK and North America and found that in‑game advertisements consistently outperform TV, social, and other online formats when it comes to recall and attribution.
Players are more likely to remember an ad they saw while playing and correctly associate it with the brand that delivered it. Xbox’s "around‑the‑game" approach—placing ads before the game launches rather than embedding them within the gameplay—adds another layer of intrigue. Our data suggest that pre‑game placements generate higher recall and attribution rates compared with intrinsic in‑game spots.
This distinction matters because, while we can often recall ads seen on television or scrolling through feeds, we do not always link those impressions to specific brands. Gaming appears to occupy a unique niche where recall and brand association are especially strong, which likely explains why companies such as Xbox and EA are increasingly exploring ad‑based models. It is also worth noting that Xbox’s ads are not woven into the gameplay itself; they appear pre‑game. In‑game ad formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and likeability.
A combined strategy—leveraging both pre‑game and in‑game ads—could theoretically provide the best of both worlds for advertisers, though it might also provoke greater pushback from players. Xbox has pledged that its advertisements will be non‑intrusive. By serving ads before the game starts, the company aims to preserve the immersive experience once gameplay begins.
This approach benefits both the player, who avoids interruptions, and the advertiser, who wants their message to be part of a seamless experience rather than a disruptive nuisance. Relevance will be key. No gamer wants to see an ad for cat food when they don’t own a cat, or a promotion for a game they have already completed.
Contextual, targeted ads that make sense for the individual player will help prevent abandonment and give brands an effective platform to reach new audiences. Nevertheless, Xbox is navigating uncharted waters. The first unknown is how players will react to these pre‑game advertisements; the second is whether the revenue generated will be sufficient to sustain the model over the long term.
The move toward ad‑supported game streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has shown a willingness to experiment. Only time will reveal whether this gamble pays off. Historically, our work in gaming advertising has often involved "watch an ad, earn an extra life" type incentives.
Xbox’s proposal differs: it asks players to watch an ad simply to access a game they already own. Our current data set does not yet indicate how this will be received. Nevertheless, broader research on ad format perception shows that when respondents are asked to describe ads they remember positively, terms like "non‑intrusive" and "immersive" rank among the top 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 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 gaming companies to follow, ultimately making video games more affordable and accessible for everyday gamers.