Forget the console wars of years past—the bombs dropped on E3 stages, the quippy ads with lines like, "Genesis does what Nintendon't." Those days are gone. We've now entered the Cold War phase of the console wars, a period of secrecy and cloak-and-dagger tactics.
The latest example: Ars Technica reports that Microsoft secretly paid out money to YouTube personalities who promoted the Xbox One—three dollars per thousand views, to be exact. That might not sound like much, but we're talking about channels that often receive hundreds of thousands or even millions of views per video.
Popular games platform Machinima has become the focus of this scandal: The promotion was advertised by Machinima UK in a now-deleted tweet; a leaked email confirms the deal. What's unclear is the breadth of Microsoft's efforts. It's doubtful Machinima was the only entity the Xbox maker contacted.
Per the Machinima email, the rules were simple: incorporate thirty seconds of game footage into a video and specifically mention that it's played on an Xbox One; tag the video with
XB1M13; and then submit the link through Poptent, a platform that specializes in crowd-sourced video-marketing campaigns like Microsoft's.
Oh, and content creators had to keep the promotion secret.
Under cover of night
A copy of the full legal agreement behind the promotion escaped into the wild. In it, there's a confidentiality section that states unequivocally, "You agree to keep confidential at all times all matters relating to this Agreement, including, without limitation, the Promotional Requirements, and the CPM Compensation, listed above."
Additionally, creators "may not say anything negative or disparaging about Machinima, Xbox One, or any of its Games" in their videos.
So Microsoft is paying for positive word-of-mouth from trusted community figures, in secret. Such faux grass-roots campaigns (known as astroturfing) are particularly effective because they don't look like advertising, so viewers typically have their guards lowered. It's also far cheaper than traditional advertising.
Ars Technica uncovered a similar Microsoft/Machinima promotion from November of last year (when the Xbox One launched). With YouTube a growing force in games coverage, it's naive to think that such things won't happen again. Still, the tactic is questionably legal. Under FTC rules (PDF), bloggers are supposed to make it clear which posts are paid endorsements—a condition that was potentially violated here.
But more importantly, how will this revelation affect the YouTube games community at large? This type of promotion is a betrayal of hard-earned trust. YouTube personalities gained sway largely because they were seen as trustworthy and "one of us" by fans, without the taint of advertising dollars. Revelations like this potentially hurt the credibility of not just those few personalities who took advantage, but the entire platform. Whether viewers will care is another story.
UPDATE: Machinima provided us with the following statement.
"This partnership between Machinima and Microsoft was a typical marketing partnership to promote Xbox One in December. The Xbox team does not review and 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."
This confirms Microsoft is paying YouTube personalities for mentions, though the burden of the "may not say anything negative" quote may fall on Machinima. Why Machinima is refusing to allow its content producers to speak ill of Microsoft is even more baffling, and still reflects poorly on the platform as a whole.
Machinima has yet to answer our follow-up questions clarifying the nature of its relationship with Microsoft. We'll update again when there's more information.