Virginie Chesnais serves as the chief marketing officer at Happydemics, a platform that specializes in ad‑tech analytics. For many years, gamers have looked at in‑game advertising with suspicion, and their concerns are understandable.
The reputation of ads within video games is mixed at best, often plagued by issues such as redirects to unrelated sites, misleading content, or hard‑to‑find close buttons that frustrate players. A recent study from eMarketer highlighted that 52 percent of gamers would abandon a session if they encountered several intrusive ad elements.
Losing half of an audience at the very moment you’re trying to engage them is hardly an effective tactic. Nevertheless, advertisements do not have to be a negative experience. The same survey 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 games continuing to rise, well‑crafted ads could find a receptive home in the gaming ecosystem. The rationale for introducing a modest advertising model to games is more compelling than many anticipate, and it has already been demonstrated in the world of linear media. Services such as Netflix, Disney+, and other streaming platforms have shown that a hybrid approach—offering both ad‑free and ad‑supported tiers—can generate substantial revenue while keeping a broad audience.
Should Xbox’s experiment prove successful, the company would not only preserve its subscription base but also unlock a fresh, previously untapped revenue stream at a moment when additional income is highly desirable. This development matters because console gaming is increasingly positioned as a premium offering.
Prices for games, consoles, accessories, and downloadable content have been climbing, making it harder for the average consumer to justify the expense. The result is a growing barrier that keeps casual gamers on the sidelines. Xbox itself has argued that, when executed correctly, advertising can lower the price of entry into gaming. The mobile‑gaming sector already provides a clear example: ad‑supported tiers allow players to engage with games without paying large upfront fees, opening the market to a wider audience.
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 retain its loyal community while simultaneously making games more accessible to newcomers. Although no formal survey data exists yet on this particular initiative, it is reasonable to assume that most gamers would tolerate a 30‑second advertisement if it meant gaining an hour of playtime on a favorite or newly released title. Xbox’s own analytics are likely to confirm this hypothesis. Happydemics’ data, gathered from 285 in‑game campaigns across the United Kingdom and North America, consistently show that in‑game advertising outperforms 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 see while gaming and correctly associate it with the sponsoring brand. This is where Xbox’s “around‑the‑game” approach—ads that appear before the gameplay begins rather than within the game world—becomes intriguing. Our research indicates that pre‑game placements enjoy a distinct advantage in recall and attribution compared with ads embedded directly inside the game environment. The distinction matters because, while we can often recall ads seen on TV or scrolling through a feed, we don’t always link those impressions to a specific brand.
Gaming appears to operate in its own league regarding this metric, which likely explains why companies like Xbox and EA are increasingly exploring ad‑based gaming models. It is important to note, however, that Xbox’s ads will be pre‑game, not in‑game. Traditional in‑game formats tend to excel further down the marketing funnel, delivering stronger lifts in brand image, consideration, interest, and overall likeability.
A combination of pre‑game and in‑game ads could theoretically give advertisers the best of both worlds, but it also raises the risk of greater player pushback. Xbox has pledged that the advertisements will be non‑intrusive. By placing ads before the game starts, the company hopes to avoid breaking the immersive experience that gamers cherish.
This consideration benefits both the player—who enjoys an uninterrupted session—and the advertiser, who wants their message to be part of the experience rather than a disruption. Relevance will be key.
No gamer wants to see an ad for cat food when they don’t own a cat, or an ad for a game they have already completed. By delivering contextual, purposeful ads, Xbox can keep players from abandoning the session while giving brands an effective platform to reach fresh audiences.
Nonetheless, 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 a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has shown a willingness to experiment with new business models. Only time will reveal whether this gamble pays off.
Historically, many gaming ad campaigns have relied on the classic "watch an ad, get an extra life" mechanic. Xbox’s proposition is different: players would watch an ad to unlock access to 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—where respondents who remember an ad are asked to describe the format—has consistently highlighted "non‑intrusive" and "immersive" as the most favored descriptors.
If Xbox and future adopters aim to make advertising a staple in gaming, these two attributes will be critical to monitor. My forecast is that Xbox will neither be the first nor the last platform to experiment with this approach.
Advertising in games has existed for years, but it has rarely been designed with the player’s experience at its core. Should Xbox succeed, it could pave the way for other developers and publishers to adopt similar models, ultimately making video games more affordable and accessible for everyday gamers.