Microsoft is reportedly working on in-game ads for free-to-play Xbox titles that could go live this year

Some Xbox games might start displaying ads sometime this year. A new report claims that Microsoft is planning on placing in-game ads for free-to-play titles in a way that would not disrupt the gameplay experience.

The report comes from Business Insider, which cites two sources “involved in the talks” about Microsoft’s rumored plan to place ads in-game. One of Microsoft's reported goals is to expand its ad inventory by giving advertisers a wider range of games where they can place their ads while developers get paid by selling ad spaces in their games. It appears that the company is in quite an advanced stage of the plan as Microsoft is reportedly looking for adtech companies and ad agencies at the moment.

Ad placement in video games is usually a touchy subject. Some previous approaches did not sit well with fans, even more so when ads interfered with the overall gameplay experience. 2K Games faced backlash in 2019 when “NBA 2K20” players found unskippable ads on loading screens of a game that cost $60 to play.

The same report mentioned that Microsoft is aware of the potential negative response to adding ads in Xbox games, so the tech giant is said to be moving forward “cautiously” with the plan. The company is aiming to establish a “private marketplace” so that only a few brands can purchase ad spaces.

It is unclear if ads will be placed on loading screens, which is one of the most common ad placements in video games. But one example provided in the report was ad billboards rendered into the games, which seems less intrusive than other forms of advertising.

Microsoft is also reportedly not keen on letting advertisers collect Xbox users’ data for targeted ads, as well as collecting a share from the ad revenue. It also appears that, aside from building its own ad network, Microsoft aims for this program to provide free-to-play game developers with more ways to monetize their projects.

Insider’s sources said the planned in-game ads on Xbox consoles could go live around the third quarter of the year. But Microsoft refused to confirm details mentioned in the report and only said in a statement, “We are always looking for ways to improve the experience for players and developers but we don't have anything further to share.”

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