Microsoft to reportedly include ads in free-to-play Xbox games

Microsoft is currently working on a way to let advertisers place ads inside free-to-play Xbox games, as per Business Insider on Friday. The company wants to create a space for ad agencies with an in-game inventory. The new project will increase Xbox’s ad inventory as they look to add more games on which brands can advertise and also allow developers to create that ad space to sell for profit. 

Microsoft understands that ads could end up irritating gamers. Their plan would ensure the ads do not hinder or interrupt gameplay. Ideas such as digitally rendered billboards in a car racing game are being evaluated. The company wants to create a “private marketplace” so that relevant and select brands get to place their ads that do not disrupt the gameplay.

Examples of sponsors on billboards are quite evident in games already. Codemaster’s official F1 games feature the billboards and brand labeling of all those who sponsor Formula One and Codemasters. EA’s FIFA is also known for featuring sideline branding of various brands affiliated with it each season. 

It’s unclear whether Microsoft plans to introduce video ads in-game lobbies or not. This is one aspect that could get annoying for gamers. There’s also no confirmation if Microsoft has pitched this idea to advertisers yet. However, the feature could become live by Q3 of this year. When quizzed about the same, one of Microsoft’s spokespeople said, “we are always looking for ways to improve the experience for players and developers but we don't have anything further to share."

Xbox does have ads on it but they are very limited. While mobile games feature ads, it’s rare for console games to feature ads. Currently, advertisers can buy space on the Xbox dashboard. A select few games also allow ads through third parties like Yahoo and Anzu. 

Microsoft has no intention of taking a cut from the ad revenue, as per the two sources of Business Insider. The company wants to enable game developers and advertisers to connect and use this space. They also want to help developers fund their free-to-play games in a better way through this method. The revenue will reportedly be shared between the game developer and the company that places the ad. 

The introduction of ads immediately poses the question of privacy online. Microsoft does not want third parties to use collected data on Xbox users and use it for targeted advertisement and product placement.  

CEO John Higgins of gaming agency OS Studios believes that all gaming companies would eventually create their private ad marketplace. He also believes that if Microsoft goes ahead with their plans, they could arrive early in that market before Sony’s PlayStation or Amazon’s Twitch begin occupying that market.