Microsoft Corp. aggressively kick-starts its video-game console business May 22 when it breaks a multimillion-dollar integrated TV, online and radio campaign -- created by Interpublic Group of Cos.' McCann-Erickson Worldwide and GMR Marketing, both New York, Freestyle Interactive, San Francisco, and Cornerstone Music, Baltimore -- touting the availability of some 70 games for its Xbox console.
On June 10, Nintendo unleashes a national prime-time TV, cable, syndication, online and print campaign for its new WaveBird wireless game controller from Bcom3 Group's Leo Burnett, Chicago. Nintendo also will support GameCube and GameBoy Advance hardware in an outdoor campaign breaking in mid-June. Nintendo's new psychological thriller "Eternal Darkness: Sanity's Requiem," debuts June 24 with a TV, print and online push.
Meanwhile, Sony is
Less than a year after entering the console gaming business, No. 3 Microsoft must make the Xbox and its library of software titles fly off store shelves in order to make a convincing dent in the market. Microsoft's latest marketing gambit is dubbed the "Xbox Title Blitz," and it will run from May 22 to June 30 backed by ad spending "well in excess of $10 million," said John O'Rourke, director of worldwide Xbox marketing.
Analysts say Microsoft needs to achieve 20% of the market to hold its own in the volatile category, making support from third-party software publishers crucial. Microsoft expects to have sold 3.5 million to 4 million consoles globally by the end of its fiscal year June 30. It doesn't break out numbers for the U.S., but NPD FunWorld estimates 2 million units have sold in the U.S. since the Xbox launched last November.
Microsoft projects an installed base of between 9 million and 11 million consoles by June 30, 2003, Mr. O'Rourke said. But he knows he has a lot of catching up to do. Sony has shipped 11.3 million PS2 consoles in North America since the advanced unit launched in October 2000 -- and 30 million globally. The Xbox will now sell for $199. Microsoft on May 15 announced the cut from $299 just a day after market leader Sony made a similar move for PS2, the Xbox's primary rival, and the PS1 (from $99 to $49). Nintendo starting May 21 lowers the price of its GameCube from $199 to $149.
At its launch, Microsoft pledged $500 million toward global marketing for the Xbox, approximately $350 million of it earmarked for the U.S. Mr. O'Rourke said the company is still spending pockets of that money. Microsoft spent $24.3 million in measured media in the U.S. in 2001 promoting the Xbox, and $8.3 million during January and February of this year, according to Taylor Nelson Sofres' CMR.
Sony, meanwhile, spent $16.7 million in measured media in the U.S. from January to February 2002, and $83 million in 2001; Nintendo spent $7.6 million from January to February 2002 and $83.5 million in 2001, according to CMR.
Xbox's multilayered promotion and ad campaign flags the new price, diverse software library and contests with prize packages including 12 Cadillac Escalade SUVs with built-in Xboxs and a trunk full of games. On-air and online ties with World Wrestling Entertainment and Viacom's MTV are included, along with promotion on top gaming sites.
The first of two TV spots breaks May 22 on cable networks including AOL Time Warner's TBS, News Corp.'s FX, MTV, Comedy Central and Walt Disney Co.'s ESPN. One spot shows a skateboarder wiping out, his board stuck to his rear end because he was so distracted thinking about the Xbox.