Microsoft is exploring a new avenue to broaden access to its cloud gaming service by testing an ad-supported streaming option. Select members of the Xbox Insiders program will have the opportunity to stream owned games for up to one hour after watching an advertisement, a model similar to ad-supported tiers found on services like Netflix and Prime Video.
This initial test is restricted to games that participants already own and is limited to a one-hour session duration. According to an announcement on Xbox Wire, the core gameplay experience remains unchanged, and the ad-supported option is entirely optional, with players able to choose alternative play methods at any time.
Microsoft stated that the test is being conducted with players in mind, highlighting that advertising has a long history in gaming through in-game placements and free-to-play models. The company believes that when implemented effectively, advertising can reduce the cost of access, offering a new pathway for players to engage with games without an upfront streaming purchase and expanding audiences.
The ads are designed not to interrupt the flow of gameplay and will be held to the same quality standards as the game content itself. Xbox plans to iterate on this test based on player feedback and usage data, with the overarching goal of providing more affordable ways to play games.
This initiative arrives at a time when affordability is a significant consideration for Microsoft's gaming division. Following price increases for Xbox consoles in 2025, further price hikes are set for August 1, with the Xbox Series X increasing to $799.99 and the Xbox Series S rising to $499.99. Microsoft has also been promoting financing options and suggesting used consoles as economical entry points into the Xbox ecosystem.
In parallel with these affordability measures, Microsoft has announced significant cost-cutting within its Xbox division, including 3,200 layoffs and the closure of at least four game studios.