Report: Microsoft is working on a program to let select brands advertise within free-to-play Xbox games, such as on a billboard, and won't take a revenue cut
Microsoft’s reported Xbox initiative puts advertising inside free-to-play games while declining a platform revenue share, a notably different monetization lever from charging players directly. Related coverage shortly afterward tied Sony to a similar PlayStation in-game ad effort, indicating that console rivals were watching the same format.
Select brands gain a prospective route into free-to-play Xbox games through in-world placements such as billboards, while Microsoft forgoes a cut of that ad revenue.
Free-to-play Xbox game operators would have an additional commercial format to consider without Microsoft taking a stated share of the advertising transaction.
Second-order effects
Sony’s reported parallel PlayStation program means brands and game operators may be able to compare in-game ad opportunities across both major console ecosystems rather than treat Xbox as a standalone channel.
Microsoft’s no-cut position makes the platform’s terms, rather than a mandatory revenue share, a key differentiator in attracting participating brands and free-to-play game operators.
Third-order effects
The later move toward ad-supported Xbox streaming suggests a broader console-to-service model in which advertising can subsidize access at both the game and cloud-delivery layers.
If platform holders continue pairing free access with ads, competition will increasingly center on where ads appear—inside games or before streamed sessions—and on the terms offered to game operators and advertisers.
The trend: Console platforms are testing advertising as a second route to fund free-to-play games and lower-cost or free access to cloud gaming.
Big scoop from @SeanMCzarnecki: MSFT is building a private ad network that will let select adtech partners sell ads inside Xbox games. Analysts said this could put MSFT ahead of Sony's PlayStation and Amazon's Twitch in the fast-growing gaming ad space. https://www.businessinside…
@denniscode
Den Delimarsky on x
It's disappointing that everything at some point becomes an ad surface. I get that this only tackles “free-to-play” games, but IMO it's a sign of things to come. There is no reason to think this won't make its way into games you pay for based on history with other products. https…
@swodinsky
@swodinsky on x
“Microsoft is worried inserting ads into Xbox games could irritate people who don't expect to see ads when playing on consoles,” but........ is gonna put ads in their games anyway? cool cool cool https://www.businessinsider.com/ ...
@epro
Emil Protalinski on x
If Microsoft really doesn't end up taking a cut of ad revenue in free-to-play Xbox games, it wouldn't be incentivized to push game developers to flood their games with ads. That *should* help the games that don't overdo it with ads win out, *if* Game Pass compensates well enough.…
@giga_bob
@giga_bob on x
But you know Gamepass couldn't have any sort of negative affect on the industry at large https://twitter.com/...
@alexhern
Alex Hern on x
Alexes said this could put their Xbox “in storage” https://twitter.com/...
@jerrycap
@jerrycap on x
$MSFT is the only company building an advertising platform for the metaverse https://twitter.com/...
@seyitaylor
@seyitaylor on x
it's not tracking if it's inside your internal network 😉 https://twitter.com/...
@linuswilson
Linus Wilson on x
Oh man! Say it ain't so! https://www.businessinsider.com/ ...
@eric_seufert
Eric Seufert on x
Everything is an ad network https://www.businessinsider.com/ ...
@rishialwani
@rishialwani on x
I guess when Xbox Game Pass won't turn a profit, this happens. | Microsoft is building an ad program that will let brands advertise in Xbox games https://www.businessinsider.com/ ...