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Microsoft paying for Xbox One praise is nothing new

by William Schwartz

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Yesterday it came to light that Microsoft was paying YouTube personalities to mention the Xbox One and praise the new hardware. Paying a hefty sum to video game content creators, Microsoft hopes to target these consumers with a new guerrilla marketing technique.

However, it seems that it might not be that new of a practice for Microsoft and the Xbox One, after all. A submission recently went live on Reddit from the person who claims to be the one who leaked the documents outlining the pay for praise conditions. While we’ve already seen and heard just what the program entails, the leaker says that Microsoft’s been paying YouTubers since the launch of the Xbox One.

In a post outlined on reconxbl, the leaker says that “They did it back in November, too, but no one cried about it back then for some reason.” and that a number of different companies have been using marketing techniques like these on YouTube. The post says that popular conventions like E3, PAX, and Comic-Con have all used similar programs with YouTube content creators.

The major difference is that this is representing consumer electronics. It’s still unclear whether this arrangement between Microsoft and Machinima violates any trade laws, or if it just resides in a grey area. By law, disclosure must be given when there’s a monetary arrangement in place between two parties when promoting a product.

Taking a look at a press release from the FTC, a 2009 revision of the laws surrounding testimonials and endorsements state that “material connection” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed.

Update: According to Microsoft the marketing partnership is a typical venture. They’ve issued a full statement regarding their deals with Machinima below.

“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.”

On Machinima’s side of this agreement, they’ve also issued a statement in the wake of the bad press. A statement to Kotaku reads, “We execute large network wide activations routinely and, where part of a promotional campaign, typically require channel partners to include certain language in their video content relating to the promotion. That didn’t happen here and we’re evaluating why. All participants are being asked today to include our standard language going-forward. We apologize for the error and any confusion.”

Now we’ll just have to wait and see if the YouTube content creators actually end up divulging their paid incentive to talk about them in their videos.

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