Microsoft is reportedly working on a new ad network that will allow advertisers to show ads in free-to-play games on Xbox consoles. According to Business Insider, Microsoft is currently in discussions with ad tech companies and ad agencies and the program could launch in the third quarter of this year.

“This new program will boost Xbox’s limited ad inventory by adding more games that brands can advertise in and by allowing more developers to sell ad space,” wrote Business Insider. “Those sources said those ads would show up as, for instance, digitally rendered billboards in a car racing game. Insider was unable to learn if Xbox will also offer other types of in-game ad units, like avatar skins or video ads that play in gaming lobbies.”

According to the report, internal discussions about this Xbox in-game ad network started around 2018 or 2019, and development accelerated following the launch of the Xbox Series X|S in 2020 and the increasing popularity of free-to-play games. Microsoft is said to be not interested in taking a cut of ad revenue for now as the company focuses on getting developers and ad networks on board.

Microsoft is already displaying ads on the Xbox dashboard, which some gamers may find a little bit too intrusive. According to Business Insider’s sources, “Microsoft is worried inserting ads into Xbox games could irritate people who don’t expect to see ads when playing on consoles, so it’s moving cautiously and intends to create a “private marketplace,” where only select brands can insert ads into games in a way that doesn’t disrupt the gameplay experience.

Business Insider reached out to Microsoft about these Xbox ad network plans, but the company didn’t comment. “We are always looking for ways to improve the experience for players and developers but we don’t have anything further to share,” a Microsoft spokesperson said.

Tagged with Gaming, Xbox