A source from Insider recently shared that Microsoft is reportedly working on a program that would show advertisements within free-to-play Xbox games that are a part of its Xbox Game Pass. The company is building a “private marketplace” that would enable certain brands to showcase their ads on virtual billboards. This program could launch as early as this summer. 

Microsoft is still pinpointing ad technology firms that would help build the catalog and cooperate on placement but has declined to confirm or deny the plans. It is not clear how else Microsoft plans on implementing the in-game ads, such as having them be a part of avatar skins or inside game lobbies. Sources claimed that Microsoft would funnel the ad revenue toward the game developer and advertising company to share the funds rather than take some of it for themselves. This would be a good way to attract more developers of free-to-play games to the platforms, as this would create more revenue for them outside of microtransactions. Customer in mind, Microsoft is concerned that ads could irritate players, therefore they would be selective on what brands would be a part of the program. According to Insider, Microsoft did not have much else to say besides a statement from a spokesperson:

 “We are always looking for ways to improve the experience for players and developers but we don’t have anything further to share.” 

In-game advertising is not a new concept. Epic Games has been known to drive revenue by enabling brands to sponsor Fortnite avatar skins. Electronic Arts normally places billboards within virtual soccer stadiums in FIFA, and basketballs in NBA 2K. However, in May of 2020, EA went under heat from fans when they noticed ads popping up at the beginning and end of replays in UFC 4. A statement from EA came out a month later apologizing for this as an inconvenience. Players who typically pay $70 for next-gen console games expect an ad-free experience. This is why it would make sense that adding ads to free-to-play games could be connected with Microsoft recently lowering the cost of their Xbox Game Pass.