Microsoft has launched a test for ad-supported Xbox game streaming, and promised the ads won't interrupt gameplay.
The test lets users stream select games from their library for a limited time supported by adverts, and is available to Xbox Insiders. During this test period, Xbox Insiders with an Xbox account can stream supported games without a subscription for free with ads, with one-hour session limits across supported devices and regions where game streaming is available.
Ads will play before streaming sessions begin and will not interrupt gameplay, Microsoft insisted. The core game experience remains unchanged, the company added. Participation is optional, and players can choose other ways to play at any time.
The test is designed to help give more people more affordable ways to play on devices they already own, Microsoft explained. You can play after sitting through two minutes of ads. When your 1-hour session ends, you can play again after sitting through another set of ads, and your progress continues across your account and devices. It's also worth noting that today, Xbox Cloud Gaming is not available without a Game Pass subscription.
“For many players, the device they already own now allows them to stream games with Xbox,” Microsoft said. “Cloud can also help Xbox One owners play newer games built for Xbox Series X|S without needing to purchase new hardware right away. That can be especially meaningful in places where consoles are harder to find or less affordable, giving more players another way to access great games on devices they already have.
“Advertising has existed in gaming for decades, from in-game placements to free-to-play models. But it hasn’t always been built with the player in mind. When done well, advertising can help lower the cost of access. It creates another way for players to get into games without an upfront streaming purchase and expands audiences through new ways to play.
“For brands, this only works if showing up here adds to the experience, not takes away from it.”
In a blog post on Xbox Wire, Microsoft outlined the following guidelines for ad-supported game streaming:
- We start with the player. Ads should create value.
- We do not interrupt the flow of gameplay.
- We hold ads to the same quality bar as our content.
- We’re clear about what’s advertising.
- We make sure ads fit what players expect on each platform.
Microsoft said it will learn from the test and improve it based on feedback.
The test of ad-supported Xbox game streaming arrives amid console price rises that are pushing some gaming hardware towards the $1,000 mark. Last month, Microsoft announced significant price rises for Xbox consoles, blaming the ongoing “components crisis.” In a blog post, Microsoft said that from August 1, the price of Xbox consoles will increase by $100 for 512GB models, and $150 for 1TB models. The 2TB model will be discontinued.
Xbox console price rises June 2026:- Xbox Series S 512GB: $399.99 —> $499.99
- Xbox Series S 1TB: $449.99 —> $599.99
- Xbox Series X 1TB Digital: $599.99 —> $749.99
- Xbox Series X 1TB: $649.99 —> $799.99
“Last October, we increased Xbox console price by $20-$70 in the U.S.” Microsoft said at the time. “We hoped another price increase would not be necessary, and we have spent the last several months working with suppliers on options. Unfortunately, console storage and memory prices have increased by more than 2.5x and we expect another doubling by the fall of 2027.
"The entire consumer electronics industry is struggling with the current components crisis, but the effects are particularly hard on consoles. Unlike phones, computers, speakers, and other consumer devices, consoles are typically not sold at a profit, but instead for less than they cost to make.”
New Xbox CEO Asha Sharma has said the spiralling cost of new and existing consoles would require "radically different business models" over the coming generation. She added that the industry had "reached a point where it will be hard to imagine" mass audiences still being able to afford "thousands of dollars" for a new console generation.
The current PS5 and Xbox Series X and S generation of consoles have seen price increases rather than cost savings. Sony itself raised the price of PS5 consoles back in March, blaming “continued pressures in the global economic landscape.” Nintendo has also not been immune, and recently acknowledged it would up the price of Switch 2, just over a year after its arrival. And Valve has bemoaned its struggle to release Steam Machine at the price it had initially hoped, instead having to go for an eye-watering $1,049.
With this context, it's easy to see why Microsoft would want to introduce ad-supported Xbox game streaming now. I imagine Sharma also has an eye on the response to the test ahead of any potential introduction of ad-supported gaming on the non-streaming side.
The test also comes amid what Sharma has called the most significant restructure in Xbox history. 1,600 staff were cut from Microsoft’s gaming business earlier this month, with another 1,600 to go over the current financial year. Four studios have left the business, with another on the way out.
“Our business today is not healthy,” Sharma said. “We are operating at margins that are 3-10x lower than comparable platform and publishing businesses. We entered Gen 9 with a smaller install base and a higher cost structure. To grow, we bet on Game Pass, multi-platform, and a broader portfolio of content. While those businesses have created meaningful value, they did not grow at the pace we expected. As that happened, our core business weakened, and we added more teams, more investment, and more time, hoping for a better outcome. And now the industry is facing the most severe hardware crisis in its history. We must reset Xbox.”
Yesterday, Microsoft announced Xbox Backward Compatibility on PC, allowing you to play classic console games on PC and handhelds such as the Xbox Ally X for the first time.
Wesley is Director, News at IGN. Find him on Twitter at @wyp100. You can reach Wesley at [email protected] or confidentially at [email protected].
