Virginie Chesnais serves as Chief Marketing Officer at Happydemics, an analytics platform focused on advertising technology. For many years, gamers have viewed in‑game advertising with suspicion, and there are good reasons for that wariness. Common complaints include redirects to unrelated sites or apps, misleading content, and the inability to locate a close button, all of which can ruin the playing experience. A recent study by eMarketer highlighted that 52 % of players would abandon a session if they encountered several intrusive ad elements.
Losing half of an audience at the moment you’re trying to engage them is hardly an effective tactic. Nevertheless, advertisements do not have to be detrimental. The same research indicated that one in five gamers would actually increase the frequency with which they play a title if the ads presented were of high quality and relevance. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming continuing to climb, well‑crafted ads could find a natural fit within the ecosystem.
The argument for a "ads‑for‑games" model is stronger than many assume, and it is already partially validated by the success of linear media. Services such as Netflix, Disney+, and other streaming platforms have demonstrated that offering both ad‑free and ad‑supported tiers can generate substantial revenue while maintaining a steady subscriber base.
Should Xbox’s experiment prove viable, it would not only preserve its paying subscribers but also unlock a fresh, previously untapped income stream—a development the company could greatly benefit from at this juncture. This is significant because console gaming is increasingly positioned as a premium offering. Prices for games, consoles, accessories, and downloadable content keep rising, making it harder for the average consumer to justify the expense and creating a barrier to entry for casual gamers. Xbox itself has stated that, when executed correctly, advertising can lower the cost of accessing games.
Mobile gaming has already shown that ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases, allowing them to enjoy content for free or at a reduced price in exchange for watching ads. Crucially, the model remains optional.
Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads. By offering a two‑tier system, Xbox aims to keep its dedicated fan base while simultaneously making games more approachable for newcomers.
Although there is no concrete survey data on this particular announcement yet, 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 on a favorite or new title. Xbox likely has internal data supporting this hypothesis.
Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America reveals that in‑game advertisements consistently outperform TV, social, and other online formats in terms of recall and attribution. Players are more likely to remember an ad they saw while playing and to correctly associate it with the brand that delivered it. This is where Xbox’s "around‑the‑game" strategy—ads displayed before the game starts rather than embedded within the gameplay—becomes intriguing.
Our data show that pre‑game placements achieve higher recall and attribution scores compared with intrinsic in‑game spots. The distinction matters because, while we may notice ads on television or scrolling feeds, we do not always link those impressions to a specific brand. Gaming appears to operate in a league of its own on this metric, which likely explains why companies like Xbox and EA are increasingly exploring ad‑based gaming models.
It is important to note that Xbox’s ads are not in‑game; they are pre‑game. Traditional in‑game formats tend to excel further down the conversion funnel, delivering stronger lifts in brand image, consideration, interest, and ad likability. A hybrid approach that combines both pre‑game and in‑game placements could offer advertisers the best of both worlds, though it may also provoke greater resistance from players.
Xbox has pledged that its ads will be non‑intrusive. By placing commercials before the gameplay begins, the company aims to preserve the immersive experience that gamers cherish. This consideration benefits both the audience—who won’t be interrupted mid‑session—and advertisers, who want their messages to be part of a seamless experience rather than a disruptive nuisance. Relevance will be key.
No one 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 for the player will reduce the risk of users abandoning the session at the sight of an irrelevant commercial, while providing brands with a highly effective platform to reach new demographics. Nevertheless, Xbox is navigating uncharted waters.
The first unknown is how players will react to the presence of ads, and 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 attitude from Xbox CEO Asha Sharma, who has shown a willingness to experiment with new business models. Whether this gamble will pay off remains to be seen. Historically, many gaming ad campaigns have relied on "watch an ad, earn an extra life" mechanics.
Xbox’s proposal differs: it asks players to watch an ad to access a game they already own. Our existing data set does not yet reveal how this will be received.
However, broader research on ad format perception indicates that descriptors such as "non‑intrusive" and "immersive" rank among the most positively received. If Xbox—and potentially other platforms in the future—aim to make advertising a staple of the gaming experience, these two attributes will be critical metrics to monitor.
In my view, Xbox will not be the first nor the last to experiment with this approach. Advertising in games has existed for years, but it has rarely been implemented with the player’s experience at the forefront. Should Xbox succeed, it could pave the way for other gaming companies to adopt similar strategies, ultimately making video games more affordable and accessible for everyday players.