Despite a massive $500 million marketing launch in 2001-slightly higher than what the entire category spent in measured media last year-Xbox so far has failed to fell Sony. Sony held a 54% share of the video console market in August vs. Xbox's 27%, according to Microsoft.
Now, with the holiday selling season approaching, Microsoft is trying to reinforce its positioning of Xbox as the prime entertainment device in America's living rooms, and it's using Mr. Combs to do so. Its new $50 million-plus global push uses the voice of the rapper also known as Puffy and P. Diddy in five spots backing a range of video games from "NFL Fever 2004" to "Grabbed by the Ghoulies." The use of a non-sports celebrity is an uncommon strategy in the category that could help Xbox stand out as music becomes an increasingly important component of video games.
In each spot, from agency Interpublic Group of Cos.' McCann-Erickson, New York, and its TAG Ideation Group, footage from the game is interspersed with shots of players enjoying the games, combined with a voice-over from Mr. Combs.
`good to play'
In "NFL Fever," for example, Mr. Combs says "It's good to make the entire league beg for mercy together." Each ends with the campaign's tagline, "It's good to play together."
Eli Friedman, group marketing and communications manager at Xbox, said plans are under way to expand Mr. Combs' role in Xbox marketing. "We look at his voice as the right voice for Xbox," said Mr. Friedman, adding he expects the relationship to "grow beyond just a voice."
Already, Microsoft is participating in Mr. Combs' "Diddy Runs the City" marathon Nov. 2 which will raise money for charity. Previously, he appeared in Microsoft internal communications.
tip of iceberg
"Microsoft, as a company's overall soul, is very synergistic and consistent to ours," said Jameel Spencer, president Blue Flame Marketing & Advertising and chief marketing officer, Bad Boy Worldwide. He said the Xbox voice-over assignment was "the tip of the iceberg."
The campaign hits as rivals gear up aggressive strategies. No. 3 player Nintendo of America is running a $100 million global ad campaign tagged "Who are you?" from agency Publicis Groupe's Leo Burnett USA, Chicago, and has slashed the price of its GameCube to $99 from $149. Sony, meanwhile, recently began bundling a free game with network adapter for online play for $199.
Microsoft is now including two free games and two free months of online gaming with its $179 Xbox game console, but Mr. Friedman declined to discuss pricing plans for the holiday.
The competition has become even more cutthroat as sales of video game hardware, including consoles and handheld devices, slide. In the first eight months of this year, sales totaled $1.3 billion, down from $1.6 billion in the same period in 2002, according to NPDFunworld. Software sales, however, were up to $2.7 billion from $2.5 billion in 2002, NPDFunworld said.
David Cole, president, DFC Intelligence, a San Diego interactive entertainment market-research firm, said there is a growing convergence between music and video games. "Xbox is targeting a 15-to-35-year-old demographic, and that's really where they need to reach out," he said.
Microsoft cites substantial share gains for Xbox and is bullish on its performance. "Xbox well exceeded sales expectations for the end of fiscal year [ended June 30] with 9.4 million units sold worldwide," said a spokeswoman. The company projects that at the end of its current fiscal year, worldwide cumulative shipments should reach between 14.5 and 16 million units.