Advertising and the video game industry have been intertwined for decades. Growing up, I almost exclusively played licensed games that promoted movies, like Lego Star Wars or The Incredibles for my original Xbox. I enjoy the occasional round of Fortnite and can see everyone from Halo’s Master Chief to Family Guy’s Peter Griffin while doing so. Still, Xbox’s ad-supported games announcement crosses a line the company never should have. 

If you missed it, “ad-supported game streaming” is currently in testing with Xbox Insiders. Those not subscribed to Game Pass Ultimate can watch ads before they play in exchange for one hour of a game they own via cloud gaming. The Xbox Wire post about it stresses that it’s optional, that “ads should create value,” and that ads will be held “to the same quality bar as our content.” 

After all the confusing messaging companies like Xbox have fed players recently, it’s hard to see this as anything more than a loss for the game industry. While video games have flirted with advertising for decades, we’re now at a point of no return – there’s no clean way for the industry to come back from it. 

The Xbox console UI for streaming games for free with ads

Advertising takes many different forms across all forms of media. We watch trailers before seeing a movie in the theater. Ad breaks have been baked into network television and broadcast radio for decades. Waiting and watching an ad has even been ubiquitous on creator-driven platforms like YouTube for a long time. Those kinds of ads aren’t as interactive, though. For the most part, you’re just watching a commercial while waiting to watch the thing you actually want.

In comparison, advertising for non-gaming products within video games has historically worked a bit differently, and more interactively. Licensed games were popular for decades, as everything from 7-Up’s Spot (he’s so cool) to the Duck Tales crew got their own video games. When game development got more expensive and licensed games couldn’t just be a rounding error on a marketing budget’s bottom line, the way advertising worked changed.

In-game ads appeared in some cases. While Steam’s policy around this is restrictive, sports games in particular have had no problem shilling brands since the 2000s. More recently, Fortnite cracked the code and found that brand collaborations draw eyes to games. Now, you can’t go a week without hearing about Top Gun in Battlefield 6 or The Simpsons coming back to Fortnite. 

To promote Christopher Nolan's The Odyssey, outfits based on characters from that movie were added to Fortnite.

Licensed games also upped their budgets, so something like Marvel’s Wolverine is the product worth promoting, not the vessel for advertisement. In all of these cases, the ads were integrated into the games we played or interactive in some form. That’s much more fitting for an interactive medium like gaming, which is possibly why there hasn't been a tremendous amount of pushback with these types of experiences.

To be clear, this isn’t a defense of advertising within games. I take a bit of psychic damage every time I boot up a game like Fortnite and see the theme song for Phineas and Ferb available for purchase next to a swimsuit Batman outfit. The fact that we generally accept something like The Odyssey outfits in Fortnite makes Xbox’s ad-supported games strategy sting even more.

I’m already used to being flooded with in-game advertisements and microtransactions every time I boot up a game like Fortnite or Call of Duty: Black Ops 7. Now, even if I’ve already spent money on a game, you’re telling me that I have to sit there and watch a noninteractive, boring ad trying to sell me something in the middle of what feels like a recession? No thanks. 

DC Comics recently promoted itself within Fortnite with swimsuit outfits

Sure, Xbox is putting limits on how obtrusive its ad-supported gaming strategy is right now, but I don’t trust that this approach will last. No amount of in-game advertising will ever be good enough for publicly traded corporations that are solely concerned with the bottom line and increasing shareholder value year over year. Microsoft’s CEO has made it clear that’s the goal with Xbox. While this is an issue that plagues all publicly traded companies, not just Xbox, it is the first game console manufacturer to embrace pre-game ads.   

We’ve seen subscription services like Netflix and Prime Video integrate ads, only to subsequently charge their subscribers more without clearly improving what they offer. Right now, Xbox is promising that “the core game experience is unchanged,” but its multitude of broken promises over the past several years prove that you can’t take Xbox at its word.

For years, the video game industry has been standing near the line of embracing ad-supported gaming, licking its lips in anticipation of crossing. Now, companies like Xbox have little to lose and are gleefully leaping over that line. Ad-supported gaming is not good for us as players, no matter how the companies doing so try to spin it.