Virginie Chesnais serves as chief marketing officer at the ad‑tech analytics firm Happydemics. 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 at best; players often encounter redirects to unrelated sites or apps, misleading content, or dismiss‑buttons that are hard to locate, all of which lead to frustration.
A recent study conducted by eMarketer highlighted that 52 % of gamers would stop playing if they ran into several disruptive advertising elements. Losing half of an audience at the moment you’re trying to engage them is hardly an effective strategy. However, 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 relevance.
With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of playing continuing to climb, well‑crafted ads could find a welcoming home in the gaming ecosystem. The argument for introducing an "ads‑for‑games" model is more compelling than many anticipate, and it has already been partially validated by the success of linear media. Services such as Netflix, Disney+, and other streaming platforms have demonstrated that a steady subscription revenue stream can be complemented by an ad‑supported tier.
Should Xbox’s experiment prove fruitful, the company would not only preserve its paying subscriber base but also unlock a fresh, previously untapped source of income—a development that comes at a time when the brand could use the financial boost. This issue matters because console gaming is increasingly being positioned as a premium offering. Prices for games, consoles, accessories, and downloadable content have risen sharply, making it harder for the average consumer to justify the expense.
The mounting cost creates a barrier that keeps many potential players out of the market. Xbox itself has stated that, when executed correctly, advertising can lower the cost of access to gaming.
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. By offering a free or low‑cost entry point, advertisers help broaden the audience. Crucially, the model remains optional. Players who prefer an ad‑free experience can continue to enjoy the service by paying a subscription fee.
By providing a two‑tier system, Xbox hopes to keep its loyal fan base satisfied while simultaneously making games more approachable for newcomers. Although there is no specific survey data on this latest Xbox announcement, it is reasonable to assume that the majority of gamers would tolerate a 30‑second advertisement if it meant gaining an hour of playtime on a favorite or newly released title. Xbox likely has internal data that supports this hypothesis. Happydemics has analyzed 285 in‑game advertising campaigns across the United Kingdom and North America and found that in‑game ads consistently outperform television, social media, and other online formats in terms of ad 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 served it. This is where Xbox’s "around‑the‑game" strategy—showing ads before the game starts rather than within the gameplay itself—becomes intriguing. Our data indicate that pre‑game placements achieve a clear advantage in recall and attribution when compared with ads embedded directly inside the game world. The distinction matters because, while we may recall ads that appear on TV or in our social feeds, we do not always link those impressions to the brands behind them.
Gaming appears to operate in its own league for this metric, which likely explains why companies like Xbox and EA are increasingly exploring ad‑based revenue models. It is important to note that Xbox’s ads will not be intruding on the actual gameplay; they will appear beforehand.
In‑game ad formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and likeability. A hybrid approach that combines both pre‑game and in‑game ads could offer advertisers the best of both worlds, though it might also provoke additional pushback from players who are sensitive to ad volume. Xbox has pledged that the advertisements will be non‑intrusive. By placing ads before the gaming session begins, the immersive experience remains untouched.
This consideration is vital not only for gamers but also for advertisers, who want their messages to be part of the experience rather than a disruption. Relevance will be another key factor. No player wants to see an ad for cat food when they do not own a cat, or an advertisement for a game they have already completed.
Contextual, well‑targeted ads can keep players from abandoning the session while giving brands an effective platform to reach new audiences. Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to the presence of ads, and the second is whether the revenue generated will justify making the model a permanent fixture.
The move toward ad‑supported game streaming reflects a bold strategy by Xbox CEO Asha Sharma, who has shown a willingness to experiment and take calculated risks. Only time will reveal whether this approach will meet its objectives. Historically, our work in gaming advertising has often relied on "watch an ad, earn an extra life" type exchanges. Xbox’s proposition is different: players would watch an ad to access a game they already own.
Our existing data set does not yet indicate how this particular exchange will be received. Related research on ad‑format perception—asking respondents who recall an ad to select positive descriptors—has identified "non‑intrusive" and "immersive" as the top attributes. If Xbox and future adopters 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 test such a model.
Advertising in video games has existed for many years, but it has not always been designed with the player experience at its core. Should Xbox manage to strike the right balance, it could pave the way for similar initiatives across the industry and make video games far more accessible to everyday gamers.