Virginie Chesnais serves as Chief Marketing Officer at the ad‑technology analytics firm Happydemics. For years, many gamers have viewed in‑game advertising with suspicion, and their concerns are not unfounded. The reputation of ads within games is mixed; players often encounter redirects to unrelated sites or apps, misleading creatives, or hide‑away close buttons that are difficult to locate, all of which generate frustration. A recent study conducted by eMarketer revealed that 52 % of gamers would abandon a title if they ran into multiple intrusive ad elements.
Losing half of an audience at the moment you are trying to engage them is hardly a winning 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 in‑game ads were of a high standard. With Xbox currently piloting an ad‑supported game‑streaming service and the overall cost of gaming steadily climbing, well‑crafted ads could find a receptive home inside the gaming ecosystem.
The rationale for introducing a modest ad‑for‑games model is more compelling than many anticipate, as linear media has already demonstrated its viability. Platforms such as Netflix, Disney+ and other streaming services have proven that offering both ad‑free and ad‑supported tiers can generate substantial revenue while maintaining a consistent service. Should Xbox’s experiment succeed, it would not only preserve its paying subscriber base but also unlock an entirely new revenue stream at a moment when the company could use the cash flow.
This development matters 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 player to justify the expense and erecting a barrier to entry for casual gamers. Xbox itself has noted that, when executed correctly, advertising can lower the cost of access to games. Mobile gaming already provides a clear example: ad‑supported tiers let players dip their toes into a title without paying a large upfront fee, and many users accept a short commercial break in exchange for continued play.
Importantly, the model remains optional. Players who prefer an uninterrupted experience can continue to pay a subscription fee to avoid ads. By presenting a two‑tier system, Xbox hopes to keep its loyal community satisfied while simultaneously making games more attainable for newcomers. Although there is no concrete survey data on this specific announcement yet, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second advertisement if it granted them an hour of gameplay on a favorite or brand‑new title.
Xbox likely has internal data supporting that assumption. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America shows that in‑game advertising consistently outperforms television, social media and other online formats when it comes to ad recall and attribution. Players are more likely to remember an ad that appears within a game and correctly associate it with the sponsoring brand. This is where Xbox’s “around‑the‑game” approach—ads that appear before the game launches rather than during gameplay—becomes intriguing.
Our data indicate that pre‑game placements generate a clear advantage in recall and attribution compared with ads that are embedded directly inside the game environment. The distinction matters because while we may recall a commercial seen on TV or a banner on a social feed, that memory does not always translate into a clear link to the brand. Gaming, by contrast, appears to excel at forging that connection, which likely explains why companies such as Xbox and EA are increasingly exploring ad‑based gaming models. It is crucial to note that Xbox’s ads are not in‑game; they are pre‑game.
Traditional in‑game formats tend to perform better further down the marketing funnel, boosting brand‑image uplift, consideration, interest and overall likability. A hybrid strategy that combines both pre‑game and in‑game ads could offer advertisers the best of both worlds, though it might also provoke stronger pushback from players who dislike any interruption. Xbox has pledged that its advertisements will not be intrusive.
By placing ads before the gameplay begins, the company aims to preserve the immersive experience once the player is inside the title. This consideration benefits both the gamer—who can enjoy an uninterrupted session—and the advertiser, who wants the campaign to feel like a natural part of the experience rather than a disruption.
Relevance will also be a key factor. No one wants to see an advertisement for cat food when they do not own a cat, or a promotion for a game they have already completed. Contextual, well‑targeted ads will help ensure that players do not abandon a session at the sight of an irrelevant commercial, while providing brands with a high‑quality platform to reach new audiences. Nevertheless, Xbox is venturing into largely uncharted territory.
First, it must gauge how players will react to the presence of ads; second, it must determine whether the ad revenue will be sufficient to justify a long‑term commitment to the model. The decision to explore ad‑supported game streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has shown a willingness to experiment with new ideas. Only time will reveal whether the strategy pays off. Historically, many of our gaming‑ad projects have revolved around a “watch an ad, earn an extra life” premise.
Xbox’s proposal is different: it asks players to watch an ad in order to access a game they already own. Our current data set does not yet indicate how this will be received.
However, related research on ad‑format perception—where participants who recall an ad are asked to select positive descriptors—has highlighted “non‑intrusive” and “immersive” as the two most favored attributes. If Xbox, and perhaps other platforms in the future, aim to make gaming ads successful, these two qualities will be essential metrics to monitor. My forecast is that Xbox will neither be the first nor the last to trial such a strategy.
Advertising in games has existed for a long time, but it has rarely been designed with the player’s experience at its core. Should Xbox manage to strike the right balance, it could pave the way for similar initiatives across the industry and make video games considerably more accessible to everyday gamers.