# Xbox's next ad play: rewards for watching

> A new patent reveals how Xbox plans to insert ads into games without angering players.
- Title: Xbox's next ad play: rewards for watching · Business Insider
- Summary: A new patent reveals how Xbox plans to insert ads into games without angering players. Xbox is exploring rewarded video ads that pause games at natural…
- Keywords: xbox, microsoft, in-game advertising, patent filing, rewarded video ads, game pass, cloud gaming, asha sharma, gaming monetization, ad business expansion, business, technology
- Source: Business Insider — https://businessinsider.com/xbox-patent-hints-at-in-game-ad-ambitions-2026-9
- Author: Lara O'Reilly
- Published: 2026-09-16T11:45:01.283+00:00
- Read time: 1 min
- Topics: xbox, microsoft, in-game advertising, patent filing, rewarded video ads, game pass, cloud gaming, asha sharma, gaming monetization, ad business expansion, business, technology
## Xbox files ad-break patent
Microsoft's new patent describes a system that detects natural pauses in gameplay, like completing a level, to insert advertisements without disrupting the experience.
## Players get paid to watch
Gamers would earn credits for watching ads, granting them uninterrupted gameplay for a set period. This "rewarded video" format is already popular in mobile gaming.
## Mobile ads pay way more
Rewarded video ads on iOS averaged $19.63 per thousand impressions, compared to $9.64 for interstitial ads and $1.30 for banners, according to gaming platform Playio.
## Xbox already testing ads
In July, Xbox began testing free cloud gaming access in exchange for watching two minutes of ads. Members of Xbox Insiders watch ads before getting a one-hour gaming session.
## CEO Sharma chasing margins
New Xbox CEO Asha Sharma is cutting jobs and seeking ways to boost profit margins. Advertising offers 100% margin, making it attractive compared to hardware or subscription sales.

> Every CEO loves advertising because it's 100% margin
## Gamers are an untapped ad goldmine
Console advertising reaches highly engaged audiences on big screens. Most Americans play games regularly, making them valuable targets for brands seeking premium placements.

> The average American may not shop online every day, but there's a very good chance they're playing a game
## Key takeaway

Xbox is exploring rewarded video ads that pause games at natural breaks and compensate players with ad-free playtime, following a mobile gaming playbook that commands premium ad rates.