Microsoft is reportedly creating an ad program that will allow brands to advertise in free-to-play Xbox games, according to a report from Business Insider. Sources familiar with the matter told Insider that one of the ways ads may show up in these games could be as digitally rendered billboards in car racing games. It’s not immediately known how else Microsoft plans to offer ads in free-to-play games.
"We are always looking for ways to improve the experience for players and developers but we don't have anything further to share," a spokesperson for Microsoft told Insider. TechCrunch reached out to Microsoft, but the company did not have any additional information to share beyond its original statement to Insider.
Insider reports that Microsoft is aware that inserting ads into games could be bothersome to users, which is why it's taking a cautious approach to the idea and is planning to create a private marketplace where only select brands would be able to buy ad space and display ads in ways that don't disrupt gameplay.
The sources note that Microsoft doesn't plan on taking a cut of ad revenue and is instead focused on building out the Xbox ad network. The company reportedly intends to allow the game developer and adtech company to share the revenue from the ads. One of the sources speculated that the reason Microsoft isn't interested in taking a cut of ad revenue is because it wants to give developers of free-to-play games more opportunities to make money.
The company is also said to be working to secure its customers' data to prevent other companies from using it. Microsoft reportedly doesn't have any immediate plans to allow advertisers to use data that it collects from searches on Bing and other sources for targeted ads on Xbox.
It's not immediately known if Microsoft has pitched the program to advertisers yet, but Insider reports that the program is set to launch by the third quarter of this year. The new program could allow developers to make money from free-to-play games without having to rely on in-game paid content, such as character skins or passes. The program could also serve as a way for brands to reach younger consumers who may have been hard to target elsewhere.