Destructoid reports Microsoft is working on ads in F2P games

Hopefully it’s not like what they’ve done to Solitaire. Unmuteable ads every 10 minutes or so. I just want to mindlessly flip cards, not listen to someone talk about their multiple sclerosis for 30 seconds.

If the in game ads appear places I would usually expect to ads them in real life, it won’t be that big of a deal to me. If they’re being shoved in front of us in annoying ways, it will be lame.

Good implementation: Piles of soda cans that are actually Mt Dew cans instead of some generic brand. Or driving past a billboard advertising Target.

Bad implementation: Battle Pass art slathered with fast food logos. Big image appearing on game launch advertising some product before you can use the main menu

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I really can’t see a way to disagree with that.

Question is what they mean with “ads”, product placement is a form of advertisement, like what you described.
However, a lot of free to play games are notorious, for having breaks which pause what the player can do.
The tactic is to annoy the player into purchasing some ad-free version of the game.