POWERED... ER, PAID BY XBOX ONE

By Jamaal Ryan

Following rumors that have circled around Microsoft’s payment of YouTubers, confirmations have crystalized, detailing the relationship between Microsoft and YouTube channel manager Machinima.

For a promotion that was intended to run from Jan 14^th - Feb 9^th, but only expired two days after, Machinima was running a campaign where their channels would be awarded $3 per every thousand views (or 3CPM) so long as they show footage of games running on Xbox One, mention that they’re being played on Xbox One, and avoid saying anything bad about Machinima (Machinima has increasingly developed a bad reputation) or Microsoft along with remaining silent about the deal. The campaign ended on the 16^th likely because they reached their 1.25 million view benchmark, which would have only cost Microsoft $3,750. You can view the details here.

With a miniscule budget hitting below $4,000, Microsoft made an intelligent and proactive business partnership in light of the Content ID debacle utilizing YouTube as a means of cheap and/or free advertising for videos that will be archived and viewed for years to come. However a wiser Microsoft would have kept the agreement at just simply plugging Xbox One, not issuing stipulations that YouTubers will have to refrain from saying anything negative about the games played on Xbox One nor requiring that they say nothing about the campaign deal.

Because of this, this has turned into an incredibly stupid endeavor that will slander the image of YouTube, specifically Machinima, and Microsoft alike.

It would be understandable if this campaign ran in November of last year shortly after the system’s launch. Microsoft has barely managed its footing communicating and promoting their new system since the days of the DRM hubbub and Sony’s damn near perfect knockout punch at E3. Releasing after the Playstation 4 at $100 more expensive, Xbox One had an uphill battle last holiday. But it was an uphill battle that they ‘won’; not against Sony, but against expectations for the console’s sales with 3 million+ units worldwide at the end of 2013 with many of it bunching up within the first 24 hours of the system’s launch.

And that’s just the point; this is the beginning of 2014, just a couple of months after Xbox One’s successful launch. This unethical promotion wasn’t needed, especially given that Titanfall is less than 2 months away. Microsoft and Machinima have effectively and, quite frankly, deservingly put themselves in hot water as their deal may very well violate the guidelines of the Federal Trade Commission that specifically states that there should have been disclosure, “when there is a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement."

The FTC’s guidelines even go as far as to illustrating an example in relation to video games:

“A college student who has earned a reputation as a video game expert

maintains a personal weblog or “blog” where he posts entries about his gaming

experiences. Readers of his blog frequently seek his opinions about video game hardware

and software. As it has done in the past, the manufacturer of a newly released video game

system sends the student a free copy of the system and asks him to write about it on his

blog. He tests the new gaming system and writes a favorable review. Because his review is

disseminated via a form of consumer-generated media in which his relationship to the

advertiser is not inherently obvious, readers are unlikely to know that he has received the

video game system free of charge in exchange for his review of the product, and given the

value of the video game system, this fact likely would materially affect the credibility they

attach to his endorsement. Accordingly, the blogger should clearly and conspicuously

disclose that he received the gaming system free of charge. The manufacturer should

advise him at the time it provides the gaming system that this connection should be

disclosed, and it should have procedures in place to try to monitor his postings for

compliance.”

But this isn’t just damaging to Microsoft or Machinima, this is potentially damaging to the industry as a whole. Tin-foil-hat conspiracists have accused many sites and community informative middlemen of the games industry that they’re paid off by large publishers. However now, this is hard evidence of the exact scenario cynics have painted for years, and gives way for a developed mistrust towards the journalists, reviewers, bloggers, vloggers, and video producers we read, watch, and listen to.

At the time after this writing, Machinima issued a statement to IGN claiming that the confidentiality agreement between YouTubers and Machinima, “relates to the agreements themselves, not the existence of the promotion." which could exempt them from FTC violations.

Sources: ArsTechnica, IGN, FTC: 16 CFR Part 255