American tech giant Microsoft Corporation is reportedly working on a program that will allow brands to showcase advertisements within the free-to-play games available on Xbox.
It has not yet been disclosed how Microsoft will be implementing such ads, like having them appear as avatar skins or inside game lobbies as videos. Sources familiar with the matter added that these ads will not be disrupting gameplay, giving the example of an ad appearing on the billboard in a racing game.
In its statement, the company expressed its concern about the ads possibly irritating players, hence why it plans on developing a private marketplace where only select brands will be allowed into the program.
Sources have also stated that the company does not intend on taking a cut from the ad revenue and will be allowing the advertising company and the game developer to share the funds instead. It is speculated that Microsoft might be wanting to use this as an incentive for getting more free-to-play game developers to its platform, as this would offer another flow of revenue apart from microtransactions within the games.
As per sources, the tech giant will not be using the data collected from its services, such as Bing, in targeting ads on its console. These ads will begin showcasing on Xbox around the third quarter of this year, claims the sources.
A spokesperson from Microsoft stated that the company is always looking for ways to improve the experience for both players as well as developers but added that more details about the subject cannot be shared currently.
In-game advertisements have been around since the mid-2000s. During this period EA Games partnered with now-defunct Massive, a Microsoft-owned advertisement company, to allow firms to place ads in games including Madden NFL, NHL, Burnout Paradise, Skate, and NASCAR franchises. These ads would be displayed on billboards or digital sporting arenas within the games.