Microsoft is reportedly working on a program that will let brands showcase commercials in free-to-play Xbox games, according to a report from Insider. Sources with knowledge of the situation told Insider that the ads do not interfere with the gameplay and may, for example, be displayed on a billboard in a racing game.
It is not immediately clear how Microsoft otherwise plans to implement ads, such as displaying them as avatar skins or as videos in game lobbies. But as Insider notes that Microsoft is reportedly concerned that the ads may “annoy” players, and plans to build a “private marketplace” to allow only select brands to participate in the program.
Sources also said Insider that Microsoft does not intend to cut advertising revenue, and will instead allow the game developer and advertising company to share the funds. It’s possible that Microsoft might just want to use this as a way to attract more developers of free-to-play games to the platform, as this would open up another stream of revenue outside of microtransactions.
According to Insider, Microsoft will not use the data it collects from Bing and other targeted ad services on Xbox. The business also does not know if Microsoft has given the idea to advertisers yet, but its sources claim that ads will start appearing on Xbox as soon as the third quarter of this year.
“We’re always looking for ways to improve the experience for gamers and developers, but we have nothing more to share,” a Microsoft spokesman said in a statement to Insider. The edge contacted Microsoft with a request for comment, but the company said it had no further information to share beyond its statement to Insider.
In-game advertising on console games is not a new concept – gaming companies experimented with them in paid games a lot in the mid to late 2000s. Around this time, EA Games partnered with the (now defunct) Microsoft-owned advertising company Massive, which allowed companies to place ads in Madden NFL, Skate, NHLand NASCAR franchises, as well as in Burnt out paradise. If you were playing any of these games at the time, you might remember seeing digital Obama ads on digital sports arenas or on billboards. Saints Row 2 even had real-life ads on billboards like this one for Netflix.
In-game ads for real-life products might have been news at the time, but with some next-generation games costing close to $ 70, players expect an ad-free experience – this is probably why Microsoft reportedly launches the free-for-all initiative -to-play games. Recently, EA tried to slip a full-screen commercial that could not be skipped UFC 4 in 2020. Fans who paid for the $ 60 game were clearly not happy, which resulted in EA pulling the ad.
Update April 16 at 13:45 ET: Updated to add that Microsoft had no additional information to share The edge.