Microsoft planning to bring Ads to Free-to-Play Xbox Games starting this year.

The Multinational Tech Company is reportedly working on an Ad Program within their Xbox Games service that would allow outside brands to advertise their products or services inside the games that are available for free on Xbox. To achieve this Microsoft aims to work closely with Adtech Companies and Ad Agencies in order to discover new ways of managing their Ad Inventory within their Free-to-play Xbox games.

Past usage of In-game Advertisements

Despite being a seemingly obscure idea, In-game ad in actuality are not a new concept. In fact, during the mid-to-late 2000s numerous Video Game Companies experimented with putting ads within their paid games. The most notable of these Companies that delved into this venture is EA Games, with their partnership with the now discontinued Microsoft-owned advertising Company, Massive Inc. Signing a two year deal that covered a range of Xbox 360 Video Game titles as well as numerous EA Games owned PC products, both Companies were able to place ads in various popular EA Video Game Franchises such as Madden NFL, NBA Live, NASCAR, NHL 08, Skate, Burnout Paradise and Need for Speed. The Companies utilized the real-world environments present in the aforementioned Video Games to showcase Digital Ads in sporting arenas and billboard within these games.

Furthermore, the now-defunct Video Game Company THQ went a step further by integrating real-life ads within their critically and commercially successful game Saints Row 2. These real-life ads served to market various notable companies such as Netflix.

Microsoft’s plan for Implementation

Presently, Microsoft does sell Ad Space, albeit in a limited amount. This is primarily in the form of Dashboard ads on Xbox Consoles and Third-Party advertising deals. However, with this new endeavor, Microsoft aims to expand their reach to encompass a wider array of brands. This is done in response to the overwhelmingly growing number of gaming audiences, majority of which are of a younger demographic and are thus not exposed to the Ads shown usually on TV. By utilizing these Ads Microsoft aims to attract a greater number of Free-to-play Video Game Developers to their Xbox Platform by giving them another medium through these ads to earn revenue for their respective Companies. Furthermore, in keeping with this sentiment, Microsoft is reportedly not going to be taking a cut of the Ad Revenue for themselves, instead the complete Ad Revenue will be shared between the Game Developers and the Adtech Companies.

This is surely to attract a great number of Video Game Developers, specifically those who develop Indie Video Game titles, to Microsoft’s platform. The Company itself also aims to benefit from this inflow of a large number of developers, since this would open the door for Microsoft to attain another stream of revenue related to their Xbox brand that is not a part of Microtransactions.

Implications regarding User Experience

One of the most important aspects highlighted by Microsoft regarding this new venture, is the potential consequences showcasing these in-game ads could have on their loyal Xbox Customer Base. Microsoft acknowledges the fact that these in-game ads could prove to be a hindrance to the immersion of their Active Users. In regard to this, the Company is proceeding with caution and is adamant to not let these Ads get in the way of their Users’ gaming experience. To achieve this, Microsoft intends to create a ‘Private Marketplace’ which will serve as a filter for only Select Brands to place ads in their Xbox games.

Currently, it is unclear in what shape or form these new Ads will manifest in Xbox games, however people would not have to wait long to see them, as these Ads will begin appearing on Xbox by the Third Quarter of this year.