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April 15, 2022 11:20 pm

Microsoft Is Building An Ad Program That Will Let Brands Advertise In Xbox Games

Microsoft wants to let advertisers place ads inside free-to-play Xbox games. According to Insider, the company "is currently identifying adtech companies who can create the in-game inventory and work with ad agencies to place the ads." From the report: 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. 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. Insider was also unable to determine if Microsoft has pitched the Xbox offering to advertisers yet. Insider's sources expect this capability to be live by the third quarter. The two sources said the tech giant did not seem intent on taking a cut of ad revenue, and that it seemed more interested in building out the Xbox ad network. Ad revenue will be shared by the game developer and the adtech company that places the ad, those sources believe. One of the sources speculated Microsoft isn't currently interested in collecting a cut of ad revenue because it wants to provide more money-making opportunities to developers who make free-to-play games. Microsoft started talks to build an Xbox in-game ad network around 2018 or 2019, but that process accelerated thanks to the 2020 release of the latest Xbox, and the boom in free-to-play titles, the two sources said. 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, the two sources said. They also said Microsoft is concerned about securing its customers' data, so other companies can't use it.

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