I take it you've never played an ad-laden game.
> Ads come last as they are a guaranteed detriment to the experience.
You definitely have that backwards. Some games are created for the purpose of selling ads. They time-gate progress, but offer to let you fast-forward through the gate by watching an ad or by selling you in-game currency.
> You have to make something really engaging first
The games are "engaging" via psychological tricks, not through actually being good games. For example, they'll offer you a loot box in exchange for watching a 15-30 second ad video. Idle games like Egg Inc will give you a 24-hour boost to your income for watching an ad, and as you play will offer ads to get instant bonuses.