Microsoft plans to bring ads in free-to-play Xbox games- report

Microsoft is exploring a system that will allow brands to make advertisements in the free-to-play Xbox games, according to a report from the BusinessInsider. The ads, however, would not disrupt the games, according to Insider’s sources who are familiar with the plans. For instance, the advertisement might appear on a billboard in a racing game.

Ads are not based on behavior research or customer data, according to the report. The data collected from Bing and other services will not be utilized for targeted ads on Xbox.  

It is not yet clear how Microsoft intends to launch ads in the games. However, the report indicated that the company is wary about the reaction of players to the ads who might find these ads irritating. As such, Microsoft intends to have a private marketplace so that only select brands will be included in the program. This aims to bring in ads without affecting the gameplay experience. 

The idea of implementing advertisements in console games is not new. Around the mid to late 2000, game companies explored this concept in paid games. However, players now are expecting ad-free games, especially with some of the next-gen games costing around $70. Ads in such paid games could irritate players. For instance, fans who paid $60 were none too happy when EA tried to include a full-screen and unskippable commercial into the UFC 4 back in 2020. EA ended up pulling the advertisement. This could be the reason why Microsoft is planning the implementation for free-to-play games only. 

Reports also say that there are no plans for the company to take a cut of the ad revenue right now. This way, the funds could be shared between the game developers and the ad company. The Verge theorizes that this initiative could be a way for Microsoft to attract more developers of free-to-play games. After all, this will provide a new stream of revenue for developers beyond the microtransactions. 

It is still unclear if Microsoft had already introduced the idea to advertisers. However, sources for the report said that the ads could be expected to appear on Xbox by the third quarter of the year. This initiative of developing an ad network in Xbox could be assisted by the company’s Impending acquisition of Activision Blizzard, which is expected to be completed around June 2023, analysts said in the report.