FTC Condemns Machinima Xbox One Marketing Campaign

Remember all the way back in January 2014 when it was discovered Machinima had been marketing Microsoft’s Xbox One through some very underhanded promotional videos? The main problem with paying Youtubers to promote the Xbox One was not that influencers are being bought off for thousands of dollars, but that stipulations in the contract forced participants not to disclose the fact they were advertising. More than 84 weeks after the fact the FTC has finally responded to the situation in a press release, Kotaku reports, citing Machinima with participating in “deceptive advertising.”

SkyVSGaming (861,000+ subscribers at time of this posting) and TheSyndicateProject (9.1 million+ subscribers) are the two prominent channels named in this investigation for dubious advertising, with the former earning $15,000 to promote the Xbox One in two videos and the latter earning $30,000 for his own two. The FTC notes that each video involved, to the common viewer, “Appear to be independently produced and give the impression that they reflect their personal views.” No such disclosure to their audience was given in any form.

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This is outside of the coordinated advertising campaign Machinima and Microsoft ad agency Starcom initiated near the launch of the Xbox One, one that rolled out in phases. Phase 1 saw five Youtubers make two video reviews. The first video included playing an Xbox 360 game, announce you will be playing Ryse on Xbox One early and portray Microsoft products in a positive light. The second video included capturing Ryse gameplay at the Machinima office, while making two to three positive talking points about the game, while maintaining positivity.

Phase 2 is what was reported on back in January last year; that Machinima network partners were paid extra money per thousand video views to promote the Xbox One in a positive light in a manner that prevents disclosing the advertisement. As part of the settlement, Machinma is prohibited by the FTC to commit such deceptive advertising again, “and the company is required to ensure its influencers clearly disclose when they have been compensated in exchange for their endorsements.”

Machinima, Microsoft and those prominent Youtubers will essentially get away with lying to their fans in order to influence the purchase of (then) $499 USD consoles without any major repercussions. Perhaps Machinima lost some potential partnerships because of this settlement, and they may end up paying a small amount, but regardless we now know that people paid to play video games from Google ad revenue are now being bought off by video game corporations without telling their fans. How much the gaming community cares remains to be seen.

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