The Real Reason You May See Ads The Next Time You Play Xbox

In-game ads for real products are common in mobile titles, which have been given a pass, arguably, because they're often free to play. But what's stopping similar advertising from becoming a feature of console games as well? The answer is complicated, and much of it has to do with how advertisements are implemented into the overall gameplay experience, and whether or not they make that experience less viable.

In mobile games, the player can often shell out real cash in exchange for the privilege of continuing their game immediately after reaching certain stopgaps — or, alternatively, they can watch an in-game advertisement for a real product to receive a similar reward. Even today, mobile games that follow the aforementioned model are considered poorly made, hardly offering the full-blown immersive experiences that players have grown to expect from console games over the past 30 or so years. 

That's why it may very likely have come as an unpleasant surprise to many gamers when, on April 15, Insider published a report claiming that Microsoft is planning to launch a new in-game ad program for its Xbox consoles. This is according to comments made to Insider by two unnamed company spokespeople who are currently part of the alleged talks taking place behind closed doors, but they're not identified beyond that. For supporting context, in September 2020, EA ended up pulling a full-blown in-game commercial from its fighting game "UFC 4," before taking to Reddit and apologizing to fans for including it at all, which doesn't bode well for Xbox in-game ads.

How would Xbox in-game ads work?

Advertisements in gaming are nothing new, but when it comes to console games, they've generally taken the form of character skins or tie-ins from other franchises. This is a far subtler approach than displaying ads in a video or even on a billboard, and it's especially common to see in games like "Fortnite" or even "Super Smash Bros," both of which tend to make their tie-ins a part of normal gameplay rather than pulling players out of the game for any amount of time.

According to one detail disclosed to Insider, only certain parties will be allowed to advertise in-game via a "private marketplace," and if the report turns out to be true, Microsoft's new program will only apply to free-to-play games. Furthermore, one of the sources behind the allegations indicates that Xbox's new ad program will supposedly put 100% of the proceeds into the participating developer's pockets. Microsoft has not confirmed these plans directly, but an unnamed spokesperson suggested to Insider that Bing data will not be used, citing concerns over consumer privacy. 

In any case, placing full-blown in-game ads for real products into any console game is inarguably a controversial move, considering that console gamers have historically taken issue with predatory monetization practices in video games, especially over the last few years. Currently, advertisers have the ability to purchase ads for display on Xbox's dashboard. If the new ad partnership service goes live, it's most likely to happen sometime in Q3 2022, according to Insider.