• by Colin Kirkland , 93 minutes ago

As Microsoft restructures its gaming business alongside new Xbox CEO Asha Sharma, the tech giant has filed a patent application for an “ad credit” system designed to contextually deliver ads to players during a game’s natural stopping points. 

First spotted by independent gaming publication Respawn First, Microsoft’s patent application was filed on Sept. 3 and describes a “contextually aware” content management system capable of “determining a promoted content window” to deliver ads to PC and console gamers. 

According to the application, players would begin a game with a specific amount of ad-free playtime and the ad delivery system would launch a short “promoted content” window. 

Natural pause events -- for example, when a player “is determined to be in a safe location, such as the user’s team base” -- will spur a loading screen during which the ad system will serve a branded promotion and reward the player with more “ad-credit” as they continue to play for free.

By developing a system that can serve ads during a game’s natural stopping points, Microsoft may be attempting to build on its recent Xbox ad tests. 

In July, Xbox began testing ways for users to stream games for free by watching ads instead of paying for a Game Pass subscription. At the time, the company failed to share exact ad formats or participating brand names, but this new patent application offers a window into Microsoft’s forward-looking strategy to monetize its gaming business through ads. 

Xbox has not grown at the pace Microsoft originally expected. Under the director of Sharma, the company is attempting to “reset” its approach to gaming, committing to the Xbox console business, which has seen major year-over-year drops in hardware revenue. 

Earlier this summer, Microsoft began restructuring its gaming division, cutting jobs, gaming studios and management layers. 

“Xbox should feel seamless, instant, and worth of the communities we serve,” Sharma said at the time, indicating plans to make it easier for developers to build games and reach players across devices, including PC, mobile, and the cloud.

“We bet on Game Pass, multiplatform, and a broader portfolio of content,” Sharma wrote in July.

On the same day Microsoft filed its contextual ad delivery patent, the company also announced that it would begin unifying its ad businesses into one consumer technology stack, showing a major shift from a platform-to-platform ad sales approach to an AI-integrated ecosystem. 

Considering these changes, it appears that Microsoft may be planning to integrate more AI-powered advertising elements into its legacy gaming business.