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 their 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 cumbersome close buttons that are hard to locate. A recent study from eMarketers highlighted that 52 % of respondents would stop playing if they ran into several intrusive ad elements. Losing half of an audience at the moment you’re trying to engage them is hardly a winning tactic. However, advertising does not have to be a negative experience.
The same research indicated that one in five gamers would actually increase the frequency with which they play a title if the in‑game ads were of a high quality. This suggests that well‑crafted, non‑disruptive advertising can coexist with enjoyable gameplay.
Xbox is currently piloting an ad‑supported game‑streaming service, and as the overall cost of playing continues to climb, premium‑grade advertisements could find a receptive home in the gaming ecosystem. The logic behind a “ads‑for‑games” model is more compelling than many assume, especially when we look at the success of linear media. Services such as Netflix, Disney+, and other streaming platforms have demonstrated that a steady revenue stream can be generated by offering both ad‑free and ad‑supported subscription tiers.
If Xbox’s experiment proves viable, it could not only preserve its existing paying subscriber base but also unlock a completely new source of income at a moment when the brand is seeking fresh financial avenues. The relevance of this development is underscored by the fact that console gaming is increasingly becoming a premium offering. Prices for games, consoles, accessories, and downloadable content have risen to the point where many casual players find them difficult to justify, creating a barrier to entry for the everyday gamer.
Xbox itself has noted that, when executed correctly, advertising can lower the cost of accessing games. Mobile gaming already provides a clear example: ad‑supported tiers allow players to engage with titles without paying a large upfront fee, opening the market to a broader audience. Crucially, any such system would be optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads, while those who are comfortable with occasional commercials could enjoy a reduced‑price or free tier.
By offering a two‑tier model, Xbox hopes to keep its loyal fan base intact while simultaneously making games more approachable for newcomers. Although concrete survey data on this specific announcement are not yet available, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second advertisement if it granted them an hour of playtime in a favorite or brand‑new title.
Xbox is likely aware of this willingness. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America reveals that in‑game advertisements consistently outperform TV, social, and online ads in terms of recall and attribution. Players are more likely to remember an ad they saw while gaming and correctly associate it with the sponsoring brand.
This is where Xbox’s “around‑the‑game” approach—ads displayed before the game launches rather than embedded within the gameplay—becomes particularly intriguing. Our data show that these pre‑game formats enjoy a clear advantage in recall and attribution compared with intrinsic in‑game placements. While traditional TV or social media ads may be remembered, they do not always translate into a strong brand link. Gaming, by contrast, appears to sit in a league of its own for these metrics, which explains why companies like Xbox and EA are increasingly exploring ad‑based models.
It is important to note that Xbox’s ads are not meant to interrupt the actual gameplay; they will appear before the session begins. In‑game ad formats tend to excel further down the conversion funnel, delivering higher lifts in brand image, consideration, interest, and likeability.
A hybrid strategy that combines both pre‑game and in‑game ads could provide advertisers with a powerful toolkit, though it also risks greater pushback from players if not handled delicately. Xbox has pledged that its advertisements will be non‑intrusive.
By positioning ads before the gaming experience, the company aims to preserve immersion for players while still delivering brand messages. This approach benefits advertisers as well, because they want their campaigns to feel like a natural 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 for a game they have already completed. By ensuring that ads are contextually appropriate and provide a clear rationale for being shown, Xbox can keep players from abandoning the session at the first sign of a commercial, 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 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 appears willing to experiment with new business models. Only time will reveal whether this gamble pays off. Historically, many of our gaming‑ad initiatives have centered on “watch an ad, earn an extra life” mechanics. Xbox, however, is proposing that players watch an ad simply to access a game they already own.
Our existing data set does not yet indicate how this will be received. Yet broader research on ad‑format perception shows that descriptors such as “non‑intrusive” and “immersive” rank among the most positively viewed attributes. If Xbox and future adopters aim to make advertising a permanent fixture in gaming, they will need to prioritize these qualities. My forecast is that Xbox will neither be the first nor the last platform to trial this approach.
Advertising has been part of gaming for years, but rarely with the player experience as the primary focus. Should Xbox succeed in delivering ads that feel seamless and valuable, it could pave the way for other companies to follow suit, ultimately making video games more affordable and accessible for the average consumer.