Virginie Chesnais serves as chief marketing officer at Happydemics, an analytics platform for advertising technology. For many years, gamers have viewed in‑game advertising with suspicion, and that wariness is understandable. The reputation of ads in video games is mixed: users frequently encounter redirects to unrelated sites or apps, deceptive messaging, or closing buttons that are hard to locate, all of which generate frustration.
A recent study from eMarketer highlighted that 52 % of players would abandon a session if they ran into several intrusive ad elements. Losing half of an audience at the moment you’re trying to engage them is hardly an effective tactic. However, advertisements do not have to be a negative experience.
The same research indicated that one in five gamers would actually increase the amount of time they spend with a title if the in‑game ads were high‑quality and well‑executed. With Xbox currently piloting a new ad‑supported game‑streaming service and the overall cost of gaming continuing to climb, there is a realistic chance that premium‑grade ads could find a welcoming home in the console ecosystem. The argument for offering a form of "ads‑for‑games" arrangement is more compelling than many assume, as linear media has already demonstrated.
Platforms such as Netflix, Disney+ and other streaming services have proven that a hybrid model—combining a subscription tier with an ad‑supported option—can generate substantial revenue while keeping a broad audience. Should Xbox’s experiment succeed, it could not only preserve its paying subscriber base but also unlock a completely new revenue stream at a moment when the brand is eager for fresh income.
This development matters because console gaming is increasingly positioned as a premium product. Prices for games, hardware, accessories and downloadable content are steadily rising, making it harder for the average consumer to justify the expense and creating a barrier for casual gamers. Xbox itself has stated that, when executed correctly, advertising can reduce the cost of entry to gaming.
The mobile‑gaming sector already shows that ad‑supported tiers can provide a gateway for players who are unwilling or unable to make large upfront purchases. Crucially, the model remains optional. Players who prefer an ad‑free experience can continue to pay for a subscription, while those who are comfortable with occasional commercials can enjoy a lower‑cost option.
By offering a two‑tier system, Xbox hopes to keep its loyal fan base while simultaneously expanding accessibility for newcomers. Although concrete survey data on this specific launch is not yet available, it is reasonable to assume that a large majority of gamers would tolerate a 30‑second advertisement if it meant they could play a favorite or newly released title for an hour without paying the full price. Xbox likely has internal research supporting this intuition.
Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America reveals that in‑game advertisements consistently outshine TV, social and other online formats 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.
Xbox’s “around‑the‑game” strategy—showing ads before the gameplay begins rather than embedding them within the game world—adds another layer to this advantage. Our data indicate that pre‑game placements generate higher ad recall and stronger brand attribution compared with intrinsic in‑game spots. The distinction matters because while we can often recall ads encountered during television viewing or scrolling through social feeds, those memories do not always translate into clear brand connections. Gaming appears to operate in a separate league for this metric, which likely explains why companies such as Xbox and EA are increasingly exploring ad‑based models.
It is also important to note that Xbox’s ads are positioned pre‑game, not during the interactive experience. In‑game formats tend to excel further down the funnel, delivering greater lifts in brand image, consideration, interest and overall likability. A blended approach—leveraging both pre‑game and in‑game ads—could theoretically offer advertisers the best of both worlds, though it may also provoke stronger pushback from players who value uninterrupted immersion. Xbox has pledged that the advertisements will not be intrusive.
By delivering commercials before the game loads, the platform aims to preserve the immersive nature of the session. This consideration benefits both gamers, who want a seamless experience, and advertisers, who prefer their messages to complement rather than disrupt the play. Relevance will be another key factor.
No one 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. By serving contextual, audience‑appropriate ads, Xbox can keep players from abandoning the session while providing brands with a highly targeted channel. Nevertheless, Xbox is navigating uncharted waters.
The first unknown is how gamers will react to the presence of ads; the second is whether the revenue generated will justify making the model a permanent feature. The decision to explore ad‑supported streaming reflects the boldness of Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with unconventional strategies.
Only time will reveal whether the approach pays off. Historically, many gaming ad models have been based on a "watch an ad, earn an extra life" premise.
Xbox’s proposal asks players to watch an ad simply to access a game they already own, a shift for which our existing data set offers limited insight. However, broader research on ad format perception shows that when participants recall an ad, they often describe the format as "non‑intrusive" and "immersive"—the two most favored descriptors. If Xbox and future platforms 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 to trial such a model. Advertising in games has existed for years, but it has rarely been designed with the player’s experience as the primary focus.
Should Xbox manage to strike the right balance, it could pave the way for other publishers to adopt similar tactics, ultimately making video games more affordable and reachable for the everyday gamer.