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Microsoft Plans to Integrate Advertisements in Free-To-Play Xbox Games

Image Source: Volodymyr Kyrylyuk / Shutterstock

Microsoft is exploring the option of incorporating ads into free-to-play Xbox games. Reports suggest that the company is collaborating with adtech firms to establish an ad network for in-game assets.

Free-to-play games often include in-app purchases like microtransactions for items such as loot boxes, skins, and in-game currency. Companies generate substantial revenue through these live service offerings. For instance, Epic Games’ Fortnite amassed over $9 billion in its initial two years, surpassing the earnings of many premium games throughout their lifespan. This financial success motivates companies to develop such games, and advertisements can further bolster their profits.

Microsoft Aims to Enable Advertisers to Showcase Their Products in Free-To-Play Xbox Games

Microsoft currently features an ad system on the Xbox dashboard in collaboration with Yahoo and Anzu. The new initiative, reportedly under development since 2018-2019, is expected to attract more advertisers. According to an article in Business Insider (requires subscription), via Kotaku, the new system may launch by the third quarter of this year. The Redmond company might not claim a portion of the ad revenue, leaving the decision to show ads up to the developers. The upcoming ad network is anticipated to present digital billboards akin to those seen in racing games.

This isn’t the initial exploration of advertising in games. In the 2000s, an ad company named Massive Incorporated facilitated the purchase of ad space for placement on digital billboards in games. Microsoft acquired this firm to delve into this concept, though it was eventually discontinued. Games like Saints Row 2, Burnout Paradise, and Madden NFL incorporated digital ad placements before the surge in popularity of free-to-play games and smartphones.

Certain studios forge partnerships with brands to promote their products within games, similar to Death Stranding’s collaboration with Monster Energy drink. Such product integrations blend seamlessly with the gameplay and tend not to disrupt players. Microsoft is reportedly mindful of ads potentially bothering gamers during console gameplay, hence aiming to establish a “private marketplace” permitting ads solely from specific brands to maintain a non-intrusive approach. Hopefully, this implies no video ads, pop-ups, or full-screen interstitials.

Privacy concerns also arise, given Microsoft’s extensive data collection practices such as telemetry on Windows and Bing search queries. Nonetheless, the company intends to prevent advertisers from employing similar targeted ad tactics and safeguard user data. Recent acquisitions of Xander (formerly from AT&T) and Actvision Blizzard, the latter featuring an ad network, could aid Microsoft in developing its ad network.

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If Microsoft implements a similar approach on PC, users can easily circumvent it via methods like editing the hosts file or utilizing system-wide ad blockers like AdGuard for Windows. Such solutions are not as accessible for console users, with potential workarounds like PiHole or DNS services requiring technical expertise.

While some reports suggest that Xbox games will now feature ads, it’s crucial to note the distinction of “free-to-play games.” Premium games for purchase and Gamepass titles, especially single-player offline PC games, are unlikely to be affected without potentially alienating a substantial portion of the gaming community. Nevertheless, this move could motivate other gaming companies to explore the creation of private ad marketplaces.

Image Source: Volodymyr Kyrylyuk / Shutterstock

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