Virginie Chesnais serves as Chief Marketing Officer at the ad‑technology analytics firm Happydemics. For many years, gamers have looked at in‑game advertising with suspicion, and there are good reasons for that wariness. Historically, ads in video games have earned a mixed reputation: they often redirect users to unrelated websites or apps, sometimes present misleading content, and frequently feature hard‑to‑find close buttons that frustrate players. A recent study from eMarketer highlighted that 52 % of respondents would abandon a game if they encountered several intrusive advertising elements.
Losing half of an audience at the moment you are trying to engage them is hardly an effective strategy. However, advertising does not have to be synonymous with annoyance. The same survey revealed that one in five gamers would actually play a title more often if the in‑game ads were of high quality and relevance.
With Xbox presently piloting an ad‑supported game‑streaming service and the overall cost of gaming continuing to climb, well‑crafted advertisements could find a welcoming niche within the medium. The argument for a "ads‑for‑games" model is more compelling than many assume, and it is already partially validated by the success of linear media.
Streaming giants such as Netflix and Disney+ have demonstrated that offering a lower‑priced, ad‑supported tier can generate substantial revenue while still delivering a reliable service. Should Xbox’s experiment succeed, it would not only preserve its paying subscriber base but also unlock an entirely new revenue 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 have risen steadily, creating a financial barrier for the average player.
Xbox itself has acknowledged that, when executed correctly, advertising can help lower the cost of entry into gaming. 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. By offering a free or low‑cost option that includes advertisements, developers can attract a broader audience while still monetizing through ad revenue. Crucially, participation would be optional.
Gamers who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads. This two‑tier approach aims to keep the existing fan base satisfied while simultaneously making games more accessible to newcomers. Although there is no concrete survey data on this specific announcement yet, it is reasonable to predict that the majority of gamers would tolerate a 30‑second commercial if it granted them an hour of playtime on a beloved or new title. Xbox likely has internal data that supports this assumption.
Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that in‑game advertisements consistently outperform television, social media, and other online formats in terms of 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" strategy—displaying ads before the game launches rather than during gameplay—adds another layer of intrigue. Our research indicates that pre‑game placements generate higher recall and attribution rates compared with ads that appear within the game world itself. The distinction matters because, while we can often recall ads seen on TV or scrolling through a feed, we do not always link those impressions to the associated brands. Gaming appears to be in a league of its own for this metric, which may explain why companies like Xbox and EA are increasingly exploring ad‑based models.
It is worth noting that Xbox’s ads are planned to be pre‑game, not intragame. In‑game ad formats tend to excel further down the marketing funnel, delivering stronger lifts in brand image, consideration, interest, and likeability. A hybrid model that combines both pre‑game and in‑game placements could theoretically offer the best of both worlds, though it also risks heightened pushback from players who value an uninterrupted experience. Xbox has promised that any advertisements will be non‑intrusive.
By placing ads before the actual gameplay begins, the company hopes to preserve the immersive nature of the experience. This approach benefits both the player—who isn’t interrupted mid‑session—and the advertiser, who wants their message to be part of the experience rather than a disruptive interruption. 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 to the individual player will reduce the likelihood of users abandoning the session and will give brands a more effective platform for reaching new audiences. Nevertheless, Xbox is venturing into largely uncharted territory. The first unknown is how players will react to pre‑game advertising; the second is whether the revenue generated will be sufficient to sustain the model over the long term. The decision to explore ad‑supported streaming reflects the boldness of Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment and take calculated risks.
Only time will reveal whether this strategy pays off. Historically, many gaming ad campaigns have relied on "watch an ad, get an extra life" mechanics. Xbox’s proposal, however, asks players to watch an ad simply to access a game they already own. Our existing data set does not yet indicate how this particular exchange will be perceived.
Research on ad‑format perception shows that when respondents recall an advertisement, they often describe the format as "non‑intrusive" and "immersive," ranking these descriptors among the most favorable. If Xbox—and potentially other platforms in the future—aim to make gaming ads successful, these two attributes will be critical performance indicators. My forecast is that Xbox will neither be the first nor the last major player to trial such a model. Advertising in games has existed for years, but it has rarely been implemented with the player's experience as the primary focus.
Should Xbox manage to strike the right balance, it could pave the way for similar initiatives across the industry, ultimately making video games more affordable and accessible for everyday gamers.