Xbox's new bet on advertising could shake up gaming — if players don't revolt
Microsoft's Xbox is testing an ad-supported model for cloud gaming, allowing users to play games for free in exchange for watching advertisements. This shift comes as the company undergoes a major restructuring, including significant job cuts, to improve its financial health.
Why it matters
This move represents a potential shift in the gaming industry's monetization strategy, moving away from traditional subscription models toward ad-supported services.
INA FASSBENDER/AFP via Getty Images A version of this post appears in the CMO Insider newsletter. Sign up for Business Insider's weekly marketing newsletter . With little fanfare, Microsoft's Xbox made a move last week that could shake up the gaming ad market. Xbox is testing a way for users to stream games they own for free by watching ads, rather than paying for a Game Pass subscription. There's no word yet on what exact ad formats will be available or which brands will participate. Xbox has trialed limited ad offerings in the past, but this effort signals that its new leadership team is serious about finding ways to make advertising work as it pursues profitability, said Itamar Benedy, CEO of the gaming ad platform Anzu. "Xbox has the opportunity to be an advertising powerhouse," Benedy said. For CMOs, Xbox has scale, premium environments, and hard-to-reach audiences.
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