Virginie Chesnais serves as Chief Marketing Officer at Happydemics, an analytics platform that specializes in advertising technology. For many years, gamers have looked at in‑game advertising with suspicion, and that wariness is understandable.
The reputation of ads in video games is mixed at best, often plagued by annoying redirects, misleading content, or hard‑to‑find close buttons that frustrate users. A recent study by eMarketer highlighted that 52 % of players would abandon a session if they encountered several disruptive ad elements.
Losing half of an audience the moment you try to engage them is hardly a winning formula. However, advertisements do not have to be a negative experience.
The same research revealed that one out of five gamers would actually increase the frequency with which they play a title if the in‑game ads were of high quality and relevance. This insight comes at a time when Xbox is piloting a new ad‑supported game‑streaming service, and when the overall cost of gaming continues to climb.
High‑caliber ads could therefore find a receptive home within the gaming ecosystem. The argument for an "ads‑for‑games" model is stronger than many anticipate, as linear media has already demonstrated. Services such as Netflix, Disney+, and other streaming platforms have proven that offering a lower‑priced, ad‑supported tier can generate substantial revenue while keeping a broad subscriber base. Should Xbox’s experiment succeed, it would not only preserve its paying subscribers but also unlock a fresh, previously untapped income stream—something the brand could certainly use right now.
The relevance of this shift is underscored by the fact that console gaming is increasingly being positioned as a premium product. Prices for games, hardware, accessories, and downloadable content keep rising, creating a financial barrier for the average enthusiast.
Xbox itself has stated that, when executed correctly, advertising can lower the barrier to entry for gamers. Mobile gaming already shows that ad‑supported tiers can give players a way to enjoy games without the need for large upfront purchases. Crucially, any ad model would be optional. Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads.
By offering a two‑tier system, Xbox hopes to keep its loyal fanbase happy while simultaneously attracting newcomers who might be deterred by high costs. Although there is currently no specific survey data on Xbox’s new approach, it is reasonable to assume that the majority of gamers would tolerate a short 30‑second commercial if it meant gaining an hour of playtime on a favorite or brand‑new title.
Xbox likely has internal data supporting this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America demonstrates that in‑game advertisements consistently outperform television, social media, and other online formats when it comes to recall and attribution. Players tend to remember and correctly associate these ads with the brands that served them. This is where Xbox’s "around‑the‑game" strategy—showing ads before the game launches rather than during gameplay—becomes especially compelling.
Our data indicate that pre‑game placements enjoy a clear advantage in both recall and attribution compared with ads embedded directly inside the game world. The distinction matters because, while we can often recall ads seen on TV or scrolling through a feed, we don’t always link them to the correct brand. Gaming appears to be in a league of its own for this metric, which may explain why companies such as Xbox and Electronic Arts are increasingly exploring ad‑based revenue models. It’s also important to note that Xbox’s ads will appear before the game begins, not within the gameplay itself.
In‑game ad formats tend to excel further down the conversion funnel, driving brand‑image uplift, consideration, interest, and overall likability. A hybrid approach—combining pre‑game and in‑game ads—could provide advertisers with the best of both worlds, though it may also provoke more pushback from players who value an uninterrupted experience. Xbox has promised that its ads will not be intrusive. By placing them prior to gameplay, the company aims to preserve the immersive nature of the gaming session.
This consideration benefits both the player, who avoids disruption, and the advertiser, who wants its message to be part of a positive experience rather than an annoyance. Relevance will be key.
No gamer wants to see an advertisement 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 in the moment will help keep players from abandoning the session and will give brands a high‑quality platform to reach new audiences. Nevertheless, Xbox is venturing into largely uncharted territory.
The first unknown is how the player community will react to the presence of ads; the second is whether the revenue generated will be sufficient to sustain the model over the long term. The decision to explore ad‑supported game streaming reflects a bold, risk‑taking mindset from Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with new business models. Whether this gamble pays off remains to be seen. Historically, many gaming ad initiatives have been based on a "watch an ad, get an extra life" premise.
Xbox’s proposal asks players to watch an ad simply to access a game they already own—a nuance that our existing data set does not directly address. However, broader research on ad‑format perception shows that when participants recall an ad, they often describe it as "non‑intrusive" and "immersive"—the two most popular positive descriptors. If Xbox and future adopters aim to make gaming ads successful, these attributes will be critical to monitor. In my view, Xbox will neither be the first nor the last platform to experiment with this approach.
Advertising in video games has existed for years, but rarely with the player experience at the forefront. Should Xbox manage to strike the right balance, it could pave the way for other publishers to follow, ultimately making video games more affordable and accessible for everyday gamers.