Microsoft Offered Compensation for Positive Xbox One Coverage (UPDATE)


Microsoft and Machinima released a joint statement on the matter, saying that it was a “typical marketing partnership.” While it seems that, under the stipulations, content producers needed to remain tight-lipped about being paid to promote the Xbox One, that is not the case, according to the joint statement.

Here is the full statement:

This partnership between Machinima and Microsoft was a typical marketing partnership to promote Xbox One in December. The Xbox team does not review any specific content or provide feedback on content. Any confidentiality provisions, terms or other guidelines are standard documents provided by Machinima. For clarity, confidentiality relates to the agreements themselves, not the existence of the promotion.

While content producers could not say the specific terms as part of the promotion, they were free to disclose that they were basically being paid to promote the Xbox One. Stealth marketing, as this can be described as, is nothing new, though ethical questions have nonetheless been raised.

You can read the original text below.

Original text:

According to a report by Ars Technica, Microsoft teamed up with Machinima to run an Xbox One marketing promotion, though some have cried foul over what that partnership stipulated.

In a now-deleted tweet, Machinima’s U.K. Community Manager revealed that, under the terms of the promotion, Microsoft would pay video producers a $3 CPM bonus. In other words, Microsoft would dish out an extra $3 per thousand views so long as 1) those content producers used at least 30 seconds of a video’s first two minutes in order to show Xbox One gameplay footage and 2) mention that they were playing on Xbox One.

However, looking a bit more into the agreement, which you can read here, Microsoft included a stipulation to the payout: “You may not say anything negative or disparaging about Machinima, Xbox One, or any of its games in your campaign video.” Furthermore, the promotion would end after videos tagged with “XB1M13” collectively totaled 1.25 million views.

Ars Technica reports that this promotion might violate the U.S. Federal Trade Commission’s guidelines when dealing with advertising that contains endorsements: “When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience, such connection must be fully disclosed.”

Microsoft and Machinima have yet to comment on the promotion, and we will update this post accordingly.

Source: Ars Technica via Joystiq