Microsoft soon to implement Xbox in-game ads

Xbox in-game ads

According to Business Insider, Microsoft is working on an ad program that will allow firms to advertise through Xbox in-game ads. According to those familiar with the endeavor, one of the ways adverts could appear in these games is as through digitally produced billboards in racing games. However, it is as of yet unclear how exactly Microsoft expects to offer adverts in free-to-play games in the future.

Microsoft reportedly will not take a part of ad revenue but will instead allow the game developers and advertisers to share the profits. Microsoft may simply wish to utilize this to entice more free-to-play game developers to the platform since this would open up a new revenue stream outside of microtransactions, subscriptions, and game purchases.

The source also mentioned that the data that Microsoft obtains from Bing and other services that accumulate information on web users for ad targeting will not be used for Xbox in-game ads. 

The financial and business news website stated that they do not yet know if Microsoft has pitched the whole idea to advertisers about their plans, but according to its sources, adverts will begin to appear on Xbox in the third quarter of this year.

“We are always looking for ways to improve the experience for players and developers, but we don’t have anything further to share,” a Microsoft spokesperson told Insider in a statement.

A new era of video game monetization

Sony is reportedly also planning to go down the same route with their PlayStation consoles. One cannot help but wonder if this change marks a new chapter in game revenue generation, and how it will intertwine, if at all, with future GameFi models that many indie game developers are pushing for.

Ads in video games are by no means unprecedented. The mobile game genre is infamous for its use – or rather its overuse – of ads as a primary stream of revenue. They evolved from popup ads to playable ads with minigame samples, to fully-fledged video ad reward systems built into the game.

No one, however, wants to pay full price for a AAA game and be inundated with ads in the middle of their game. That is why the Xbox in-game ads will be confined to free-to-play games.

According to Insider, Microsoft recognizes that adding advertisements inside games may annoy consumers, so it’s taking a cautious approach and plans to create a private marketplace where only select businesses will be able to buy ad space and display ads in ways that don’t disturb gameplay.