We've been intrigued as to how this works, and courtesy of a Brazilian user known as JonyMzs over on social media, we can see an example of Fortnite with the new ad-based system in their footage.
The video shows them waiting in a queue for about a minute before receiving a 30-second advert highlighting various Xbox games. They're then thrown into the game and warned that they only have a one-hour session.
You can see the clip in the timestamped YouTube video up above, and here's what they had to say about it in an auto-translated tweet:
"1st Free Xbox Cloud Gaming Test with Ads! In this test with Fortnite without any Game Pass plan linked to the account, I got: 1 minute of queues, 30 seconds of ads before opening the game, 1 hour of session starting from the opening of Fortnite."
As far as we can tell, you can keep going back for free one-hour sessions as much as you like, but obviously the downside is that if you're in the middle of a match of Fortnite, for example, you'll be kicked out when the session ends.
Xbox plans to keep improving this offer over time, and it'll apparently evolve based on player feedback. At first glance it seems a pretty great option for anyone who doesn't have an Xbox Game Pass subscription and wants to play free-to-play or even their owned games via the cloud, and we just hope the ads don't get more intrusive in the future.