A new report claims Microsoft is working to build an in-game advertising network for free-to-play games on Xbox consoles.
According to Business Insider, who claims to have spoken with “two people who are involved in the talks,” Microsoft are seeking to partner with adtech companies to create in-game assets that would in turn be used to place adverts within free-to-play Xbox titles.
Said sources explained that these ads may manifest, for example, as a billboard in a racing game, and stated that they expect this capability to be live by the third quarter of this year.
Interestingly, the sources claimed that Microsoft is not interested in the ad revenue that could result from such an endeavor, but rather its potential to eventually spin-off into a full blown Xbox ad network.
Providing a brief history of the idea, they explained that talks to build an in-game Xbox ad network reportedly began around 2018 or 2019 and picked up steam following the glut of free-to-play titles and the recent launch of the Xbox Series X/S.
One of the two sources, however, speculated that Microsoft’s passing on ad revenue was being done by the company in the hopes of providing additional income streams for free-to-play developers – in other words, an incentive for these titles to come to the Xbox platform.
As such, Microsoft supposedly plans to share any resulting ad revenue between a game’s developers and the adtech company responsible for integrating the ad.
The sources also alleged that Microsoft is fully aware – and concerned – that players may react poorly to these new adverts, and thus are attempting to make them less intrusive to a given game experience.
To that end, the company is supposedly developing a “private marketplace” to offer select brands the option to insert their ads into games in a way that refrains from too heavily intruding on gameplay.
Though Microsoft was noted as being concerned with preventing customer data from unathorized access by other entities, one source assured Business Insider that they were taking steps to prevent such an event.
Referring to the bevy of consumer data collected by Microsoft across their various websites and software, one source asserted, “The problem with [sharing this info across platforms] is there are regulatory controls and privacy releases relevant to each platform and they’re not cross-platform compatible.”
“If I were to read between the lines, it’d be like a 10-year goal,” the source proposed, “but that has serious hurdles and Microsoft is really strict about their data.”
However, Business Insider noted that they themselves were unable to confirm whether this program would extend to other digital forms such as skins or video ads during pre-game lobbies, nor if Microsoft had actually begun pitching the concept to advertisers.
When asked by the news outlet for confirmation on this system’s future implementation, Microsoft, unsurprisingly, avoided giving a direct answer. Instead, a spokesperson simply stated, “We are always looking for ways to improve the experience for players and developers but we don’t have anything further to share.”
Though this particular system has yet to be implemented, Microsoft has already begun to dabble in providing user-specific advertisements across its product offerings.
Currently, advertisements can be seen on the Xbox dashboard, and some games allow integrated ads through such third party service providers as Yahoo! and Anzu.
Further, their Windows 10 operating system features togglable ads and suggestions (which are enabled by default), the launch of Windows 11 was hampered by its inclusion of a built-in, system-breaking ad, and they’ve begun experimenting internally with placing adverts within Windows 11’s File Explorer.
Beyond their near-standard presence in free-to-play mobile games, previous attempts at implementing in-game advertising systems have usually ended with developers facing extremely negative feedback.
In 2020, Riot Games began adding ad banners to League of Legends eSports matches.
At the same time, Addtech company Admix announced that they had raised $7 million for “non-intrusive” in-game advertising, later raising another $25 million in late 2021 in preparation for metaverse technologies.
In 2021, Facebook tested the use of in-game adverts in the Oculus VR release of Blaston before ultimately removing them less than a week after they were implemented.
That same year, EA similarly disabled in-game adverts in EA Sports UFC 4 – in this case two weeks after launch – after receiving a deluge of “abundantly clear” negative feedback regarding their decision.
2K Games was also met with disgust when they began adding adverts to their NBA2k franchise, ranging from literal commercials to egregious (even for the series) instances of product placement, beginning with NBA2k19 and continuing on through to the recent NBA 2K22.
Despite this, EA responded to the backlash by fiercely denying that it was pursuing in-game video advertisements.
“Following incorrect reports suggesting that we are looking to introduce ‘TV-style’ commercials into our games, we wanted to clarify that in-game advertising for console games is not something we’re currently looking at, or have signed any agreements to implement,” a company spokesperson told PC Gamer. “Creating the best possible player experience remains our priority focus.”
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