Virginie Chesnais serves as chief marketing officer at Happydemics, an ad‑tech analytics firm. For many years gamers have been skeptical of advertisements that appear within games, and their concerns are not unfounded.
In‑game ads have earned a mixed reputation because they often redirect users to unrelated sites or apps, present misleading content, or feature obscure close buttons that frustrate players. A recent study from eMarketer revealed that 52 percent of gamers would stop playing if they encountered several disruptive ad elements. Losing half of an audience at the moment you are trying to engage them is hardly an effective approach. However, advertisements do not have to be a nuisance.
The same research indicated that one in five gamers would actually increase the frequency with which they play a title if the ads were of high quality and relevance. With Xbox currently piloting an ad‑supported game‑streaming service and the overall expense of gaming climbing steadily, well‑crafted ads could find a welcoming niche in the ecosystem.
The argument for incorporating a modest ad‑for‑games model is stronger than many realize, as linear media have already demonstrated its viability. Services such as Netflix, Disney+ and other streaming platforms have proven that a consistent, ad‑free tier can coexist with a lower‑priced, ad‑supported option, generating additional revenue while expanding the audience.
Should Xbox’s experiment succeed, it would not only preserve its subscriber base but also unlock a fresh, previously untapped income stream at a moment when the brand is seeking new financial levers. This development matters because console gaming is increasingly positioning itself as a premium offering.
The price tags attached to new consoles, blockbuster games, accessories and downloadable content are rising, making it harder for the average consumer to justify the outlay. Xbox itself has noted that, when executed correctly, advertising can lower the barrier to entry for gamers. Mobile gaming already offers a precedent: ad‑supported tiers allow players to experience titles without paying large upfront fees, thereby widening the market.
Crucially, participation would be optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads, while those willing to watch brief commercials could enjoy a reduced cost.
By presenting a two‑tier system, Xbox hopes to keep its loyal fan base satisfied while simultaneously attracting newcomers who might otherwise be deterred by price. Although there is no specific survey data on this particular launch yet, it is reasonable to assume that most gamers would tolerate a 30‑second advertisement if it granted them an hour of playtime in 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 shows that in‑game ads consistently outshine TV, social and standard online ads in terms of recall and attribution. Players are more likely to remember an advertisement they saw while gaming and correctly associate it with the sponsoring brand.
This advantage becomes even more pronounced when ads are placed "around the game"—for example, during the loading screen or before the session begins—rather than embedded within the gameplay itself. Our data indicate that such pre‑game placements generate higher recall and clearer brand attribution than intrinsic in‑game placements.
The distinction matters because, while we can often recall ads seen on television or scrolling through a feed, we do not always link them to the correct brand. Gaming appears to occupy a unique position in this regard, which explains why companies like Xbox and EA are increasingly exploring ad‑based models.
It is essential to note that Xbox’s plan involves pre‑game ads, not intrusive pop‑ups during gameplay. Pre‑game formats preserve the immersive experience by delivering the commercial before the player is fully engaged, satisfying both gamers and advertisers who want their messages integrated without causing disruption.
Relevance will be key. No player 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. By serving contextual, targeted ads, Xbox can keep viewers from abandoning the session while offering brands a premium platform to reach fresh audiences. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how players will react to the presence of ads; the second is whether the revenue generated will justify making the model a permanent fixture. The move to test ad‑supported streaming reflects Xbox CEO Asha Sharma’s willingness to experiment and take calculated risks.
Only time will reveal whether the strategy pays off. Historically, many gaming ad models have relied on "watch an ad, earn an extra life" mechanics. Xbox’s proposal is different: it asks players to watch an ad to access a game they already own.
Our existing data set does not yet show how this will be received, but broader research on ad format perception suggests that non‑intrusive and immersive experiences are the most positively received attributes. If Xbox—and potentially other platforms—can deliver ads that meet these criteria, they will likely succeed. In my view, Xbox will not be the sole pioneer of this approach.
Advertising in games has existed for years, but often without the player’s best interests in mind. Should Xbox manage to implement a model that feels respectful and adds value, it could pave the way for other publishers to follow, ultimately making video games more affordable and accessible for everyday gamers.