Microsoft is reportedly allowing ads to be inserted into "free-to-play Xbox games." This program will reportedly launch in the third quarter of this year.
According to Business Insider, these ads could appear as rendered billboards in a racing game. However, it could not be confirmed whether these ads will include avatar skins or video ads.
Interestingly, Xbox is reportedly more interested in building its ad network as it is said that Microsoft has no intention of making a cut from ad revenue, but is trying to determine which companies and ad agencies to work with. Instead, the revenue from the ads will be shared between the game developers and the respective advertising company.
Microsoft is reportedly looking to provide game developers with an opportunity to earn more money from their free-to-play games. Between 2018 and 2019, Xbox slowly started building its in-game ad network, but plans stepped up in 2020 due to the launch of the Xbox Series S|X.
Microsoft also reportedly has some concerns about possible backlash from consumers to this initiative, as console gamers aren't used to seeing in-game ads unlike mobile players. For example, EA placed in-game ads for UFC 4, but removed them after fan backlash.
The company is also concerned about securing its customers' data and keeping it out of the hands of other companies. As such, Microsoft reportedly has no plans to allow advertisers to use their data collected from Bing, other sites and software to target Xbox gamers.
“We are always looking for ways to improve the experience for gamers and developers,” a Microsoft spokesperson told Business Insider. said. Ads are currently limited to places like the Xbox dashboard.
In-game ads are not something that hasn't been seen before. Former US President Barack Obama had in-game ads in EA games like Burnout Paradise, Madden 2008 and Skate during his next election campaign in 09.