Destructoid Checkpoint: The future of games is advertising

I hope you like advertisements, gamers. We’ve lost the war against DLCs, microtransactions, and expensive versions that let you play three days early. Those battles are over, but mostly because we never really put up a fight. 

We’ve already discussed that the gaming industry is trying to figure out how to keep the cash rolling and will be broadening its horizons for monetization possibilities. Today, let’s focus on one particular part of those growth opportunities, and how it’s going to become the next big thing, and how that absolutely sucks. 

The AI elephant in the room

When you examine a market, you look at the habits of the healthiest companies. The easiest marker for health in a society that values cold, hard cash above all is how much that company earns, and, right now, Microsoft is earning a lot of money, so we can consider it to be healthy. It reported $26 billion in net income on $70 billion in revenue in March, just for the previous quarter, and they have been firing plenty of people on either side of that date. 

Their reward for this? A share value that broke the $500 point for the first time in July. In a letter to staff on Thursday, July 24, 2025, Microsoft CEO Satya Nadella referred to this as “the enigma of success in an industry that has no franchise value.” Nadella is willing to acknowledge that things are unusual. They are generating revenue, and their strategic positioning and market value are all improving. He is willing to acknowledge that, despite this, they are doing layoffs. He is not willing to challenge it as necessary because this is the shift from layoffs as survival to layoffs as strategy.

He is unwilling to offer a solid reason for why that is, outside of this nebulous concept that the industry they are in, software, has no franchise value. 

Of course, he gets to that a couple of paragraphs later; he was just unwilling to say it in the moment. 

AI.

Microsoft is going all in on AI, and, according to Nadella, they plan to “reimagine every layer of the tech stack for AI.” Like much of the tech industry right now, Microsoft is obsessed with leveraging AI so it can sort out that one major problem that has haunted it for years: paying people to work. They cannot quite openly and boldly join the dots just yet, but it’s all there for anyone who isn’t an utter idiot to see. 

Shoot this baddie, buy this inexplicably personalized product

So, big companies like Microsoft are making lots of money and firing people and focusing on AI, but what does that have to do with gaming? We can assume that what occurs at Microsoft occurs at Xbox, and where Xbox goes, the industry goes. AI is about to solve a major problem for advertisers, and that is going to boost the value of advertising to a critical point for the games industry.

A new PWC report shows that global entertainment and media revenues will hit $3.5 trillion by 2029. One of the key areas of growth will be advertising spend. Why? Because the assumption is that AI will transform this field. As much as I like to make fun of AI and all the hyper-inflated claims from tech bros, AI will actually have a very large impact on advertising. 

The main issue with advertising has always been that it oversimplifies the audience and overcommits to the message. Many of the greatest campaigns in history were overtly noncommittal, not really saying much about anything beyond projecting a vague and universal vibe. 

“Just Do It” is a phrase that people associate with effort, risk of failure, and human endeavour, because the adverts, ever since the very first one, which featured an 80-year-old runner in 1988, have focused a lot more on people trying than on what shoes they are wearing. 

For a period of time in the 90s, Guinness adverts were some of the most abstract and creative in history, raw brand building without saying ANYTHING in its purest form. It wasn’t about what Guinness was; it was about what Guinness meant in a philosophical sense. Pepsi made themselves about being the outsider, while Coke made themselves about family. Red Bull, the most disgusting and vile concoction in human history, made itself about jumping off buildings and flying airplanes under bridges because if you are going to die a horrible and too-soon death, then you might as well drink raw garbage water before you do it. Or something. 

But most ads are not like that. Most ads are pushing away as many people as they are bringing in. Any value you seek to align with pushes someone else away. Like blue? Well, I hate red, so I am not buying this throw pillow. Enjoy the smooth twang of country and western? Well, I hate hats, so I’m out of here.

AI in the ad space will make it very good in two areas, which are targeting and personalization. It is very good at drawing connections between simple data points, which is what advertising is. It is about breaking down your demographics and habits, then drawing a big spiderweb, and wherever the web looks thick and fat, you get advertised to. 

It will also be good at making up ads on the spot to appeal to you. Sounds ridiculous, but the ad tech that you see everywhere isn’t really part of the websites you look at; it’s a portal to a totally different part of the webspace that flashes images at you. It will be reasonably easy for AI to develop a concept of who and what you like, based on what you read on a site, then show you variations of an ad that highlight different tones, themes, word choices, and images. You might buy the same product as a friend, but never actually see the same ad.

(To sidetrack for a second, this is really bad for consumers who wish to at least attempt to consume ethically. The performative progressive stances of (let’s face it) most major companies won’t even be necessary now. They can just pretend to be something different to just about everyone. But, we don’t want to get too deep into that today.)

But I digress

What we do want to do is mention that gaming—meaning the medium of games, the thing that you see when you are looking at a screen and playing a game—is terribly underutilized when it comes to selling you something else. Sure, that sounds gross, because it is, but it also sounds true, because it is. 

Games spend almost all their time showing you the game you have already bought and are currently playing. Sure, it will sometimes show you DLC or microtransactions, but that is not an ideal form of advertisement, because these things need to be made, which has a cost, and you might not buy them. The best thing to show you is something that someone else made, and that they are paying for the privilege of showing you. 

Movies, even in cinemas, have ads and trailers beforehand. Television broadcasts and shows have all sorts of ad breaks. They also have product placement, and while games can and will do some of that, it’s hardly the norm, no matter how many Monster Energy (also total garbage water, might I add) cans you drank in Death Stranding. 

Games, as everyone loves to tell us as if it’s a badge of honor, and a fact that they reiterate in this PWC report, is an industry that is worth more than movies and music combined. It was worth $224 billion in 2024 and will be worth $300 billion in 2029, all without really pulling the advertising lever.

We have already seen patents flying around for a system that can ascertain if ads in games have been seen by the user (you don’t get payouts for impressions that are not considered valid), and that patent is nearly a decade old at this point. Microsoft is showing ads in its Xbox menus, and even plans on bringing ads to your Start Menu on your PC.

Ubisoft blamed a “technical error” for an ad popping up while a player was going into the pause screens in one of their games back in 2023, but the technical error was only that it showed up, not that it existed. It was an ad for another game of theirs, and it had a “Buy Now” button; the only problem was that it populated when it shouldn’t have. The logical next step for a system like that is to test out of ecosystem advertising. 

The value of such advertising is, by all reports, about to go up, and staying out of the advertising game will just not be a possibility anymore for publishers who are driven by the need for more profits.

In the future, you can expect pop-ups in menus, small fixed ad placements in pause screens, in-game diegetic ads, and product placements. It’s all coming and will be commonplace over the next five to ten years unless we kill it now. This is all being worked on and perfected behind the scenes, and it has been AI-powered ever since some smart engineer figured out how to do that and then cost himself his job.

The only way to stop this is to simply not buy games that implement these systems, and to refund games that are revealed to have them only after release. Sitting back and allowing publishers to make this inevitable move into being ad providers for third parties is just not something that we can afford.

I want you to think carefully about how many ads you see in your daily life now, versus ten years ago. I am willing to bet that one of the few breaks you get from being advertised at is while playing a game or reading a book. 

It would be a shame to lose that.

What’s happening, Destructoid?

Over on Dtoid, Andrej Barovic is wondering about special interest groups using pressure on payment processors to kill off the games they don’t like. - “Following Steam’s purge of NSFW games at the behest of payment processors (Visa and Mastercard), itch.io has also been targeted and forced to cull any and all NSFW-labeled games from its platform. Though the games targeted could be argued against on moral grounds, it is no right of payment processors to police speech and force their own “ethics.””

Kacee Fay has the Watchlist ready for you - “Kpop Demon Hunters greatly exceeded my expectations, though, with a compelling storyline, catchy tunes, emotional moments, vibrant visuals, and so much more. It’s easily one of my favorite films I’ve seen all year, and it’s such a pleasant surprise I wasn’t expecting at all.”

Kyle Ferreira is not a fan of Mega Dragonite, but appreciates the on-field presence, nonetheless. - “But no, instead we got a de-evolution, with Nintendo deciding to add wings and a pearl—Dragonair features—instead. Did it also lose stats to be closer to Dragonair’s? (Don’t worry, that’s just me being sour). Where are the slanted eyes, reddish tint, shoulder spikes, or even spiky wings to make Dragonite look as tough as it really is? It looks more like a healer than a damage dealer as a Mega.”