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 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 primetime TV, cable, syndication, online and print campaign touting its new WaveBird wireless game controller via Bcom3 Group's Leo Burnett USA, 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 set to unveil a new brand campaign this week for PlayStation 1 and 2 by Omnicom Group's TBWA/Chiat/Day, Playa del Rey, Calif. Separate summer and fall media flights are planned highlighting flagship titles under the tagline: "Live in your world. Play in ours." Sony has used the line in various pieces of advertising before but not in an overarching sense.
Less than a year after entering the console gaming business, 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. 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 and 11 million consoles by June 30, 2003, according to John O'Rourke, director of worldwide Xbox marketing. Mr. O'Rourke 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 2000-30 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).
Mr. O'Rourke's latest marketing gambit is a campaign dubbed the "Xbox Title Blitz" running May 22-June 30 that he says is "well in excess of $10 million." At its launch, Microsoft pledged $500 million toward global marketing, for the Xbox, approximately $350 million of it earmarked for the U.S.
Microsoft, Mr. O'Rourke said, 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 spent $16.7 million in measured media in the U.S. from Jan.-Feb. 2002, and $83 million in 2001; Nintendo spent $7.6 million from Jan.-Feb. 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 Xboxes and trunks 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.
Market share for consoles:
Sony's PlayStation 2: 70%
Microsoft's Xbox: 16%*
Nintendo GameCube: 14%
2001, NPD Funworld. *introduced November 2001.