Report: Microsoft exploring methods to carry advertisements to free-to-play Xbox video games

Microsoft is currently working on a method of bringing ads into various free-to-play games on the Xbox platform, according to a report from Business Insider.

Microsoft has yet to officially comment on the matter. As per the original report, this in-game ad campaign would be limited to specific brands via specific deals, as opposed to running user-targeted commercials via whatever data Microsoft has collected from a specific Xbox owner.

The ads are further planned to appear in ways that specifically aren’t disruptive to gameplay, with one example being the billboards by the side of a racing game’s track. Other options for non-disruptive ads could include menus and loading screens, particularly for games where a big honkin’ billboard is not a commonly-encountered feature in the setting.

The report also claims that Microsoft itself wouldn’t take a cut of whatever revenue these ads generated, and would allow the ad agency and game developer to share those funds.

GeekWire has reached out to Microsoft for comment on the issue, and we’ll update this article when we hear back.

As speculated upon by the Verge, an ad deal like this one could be used by Microsoft to encourage more free-to-play (F2P) developers to publish their games for the Xbox platform. Many of the biggest F2P games, such as Roblox, Apex Legends, and Warframe, are also some of the biggest hits in the current video game industry.

F2P games’ revenue tends to come from in-app purchases that speed up, refine, or customize play, rather than charging an up-front fee for entry. Fortnite built itself into a billion-dollar juggernaut on the back of its character customizations, where players can drop actual money to dress their avatars up in outfits that resemble high-end fashion trends, Marvel superheroes, or characters from other games entirely.

However, long-time video game fans also have a well-earned cynicism about in-app advertising, due to various incidents that mostly trace back to the third-party developer Electronic Arts.

In a series of efforts with which to defray the admittedly enormous costs of modern-day “AAA” video game development, EA has traditionally been at the forefront of gaming ads. This reached a recent all-time nadir in late 2021 when fans discovered an incredibly blatant quest in NBA 2K22‘s free-roam mode that guest-starred Jake, the character from State Farm Insurance’s TV ads.

The point is that if Microsoft wants to try to put inobtrusive ads in video games, the bar right now is several feet underground. It would be difficult to do worse.