Microsoft’s Xbox One reveal generated an immense amount of coverage in game media and the mainstream media as well, and also some criticisms among gamers. The challenge facing Microsoft at E3 is to fully win over gamers and set the stage for the company to become the #1 next-gen console this holiday season. Beyond that, Microsoft also wants to lay the foundation for victory against rivals Apple and Google for control of the television set into the future. The Xbox One could be the cornerstone of Microsoft’s grand crossover strategy involving smartphones, tablets, PCs and consoles. It’s an incredibly ambitious marketing task, and it begins with E3.
The console marketing struggle seems much like a presidential campaign. The three major candidates all need to appeal to their base (in this case, gamers) in order to win the primary (the E3 show). When the fall campaign for the all-important audience in November (when next-gen consoles begin selling), the prize goes to the candidate who can appeal to the largest possible audience – and thus get the most sales. Winning the hardcore gamers will not be enough to beat a console that has appeal to a broader audience.
Microsoft and Sony are clearly the two major-party candidates, well-funded and with powerful backing from key groups (big publishers), albeit with two widely different messages. Nintendo is the wacky third-party dark horse candidate, with the offbeat policies and perhaps some compelling new ideas that may appeal to a broad swathe of the audience.
So far, at least, it appears that Sony will be making its appeal primarily as a game machine, and in the fall perhaps alluding to some media features in an effort to make the console more appealing to people whose primary use case may not be games. Microsoft, by contrast, appears to be aiming to win the hearts, minds and wallets of the broader audience of TV watchers, sports fans, and media consumers. Nintendo is probably going to focus on key Wii U titles shipping for the holiday season, stressing the strong appeal of familiar brands in new and hopefully exciting games.
The E3 show will see Microsoft working to shore up its image among gamers, which it must surely be aware it needs to do after the criticisms in the game media. Microsoft has to clarify the situation with used games and whether or not the Xbox One needs to be connected all the time. At the same time, expect Microsoft to stress the advantages that gamers will gain from being on a connected platform.
Beyond that, Microsoft needs to display an impressive set of games both for launch and in the next year to convince gamers that the Xbox One is a great investment in cutting-edge, immersive gaming. Microsoft will have to resist its impulse to talk about non-game features of the Xbox One; the company should save that for the marketing aimed at the mass audience. Microsoft must give the gamer audience watching E3 coverage the exciting new games they are craving.
We can expect a Microsoft presentation focused relentlessly on games, and a booth to match. Third-party publishers will be featured along with Microsoft games, as the company will wish to show the broad support expected for the Xbox One. More interesting will be to see the range of genres on display; will Microsoft reach out to casual gamers and the younger gamers as well as the hardcore, older crowd It’s likely that we will see some titles showing a lighter side, but the proportion will be illuminating. Microsoft has to choose between strengthening its appeal to the hardcore, or broadening the appeal to the mass audience. Odds are we’ll see more hardcore titles showcased in prime spots, given that this is E3 and that Microsoft’s first concern will be the most committed gaming audience.
Microsoft will also be revealing more information on its services for the Xbox One. Sure, we expect to see all the familiar things from Xbox Live, no doubt enhanced in many ways. The question will be how is this service made available Will there be an annual fee What’s the price point Will some Xbox Live features be available to all for free These are critical questions in gauging the likely market acceptance of the Xbox One. A $10 monthly fee on top of several hundred dollars for hardware might be a significant barrier to sale, if the perceived value of the services provided is not sufficiently high.
There’s also a persistent rumor that Microsoft might offer a version of the Xbox One at a lower retail price, such as $299, with a commitment to a $10 or $15 per month, 2-year contract (what services this contract might include, if any, are unknown). While this would boost the overall price, it would give Microsoft a strong selling point for the Xbox One – “it’s less money up front than a PS4 or Wii U.”
Microsoft has a larger target than the game industry, and the marketing of the Xbox One will doubtless reflect this. Microsoft intends to not only exceed Sony and Nintendo in market share for the next round of consoles; it wants to preempt Apple and Google from owning the television experience. Keeping the lead in the console market is just an early battle in this long-term marketing war. We won’t see this strategy emerge until closer to the launch date for the Xbox One, when Microsoft will be unleashing a broad marketing campaign. If this is indeed Microsoft’s marketing plan, we’ll see advertising targeted to a broader demographic that focuses on the TV experience and other non-game aspects of the Xbox One.
Microsoft cannot allow the long-term goal to get in the way of the short term objective of being seen as the leader coming out of E3. There’s a fine line to walk, with the necessity to highlight the Xbox One’s exclusive games and gaming features, yet make sure to reference the non-gaming features that could appeal to gamers and that set the console apart from the PS4. Done properly, Microsoft will emerge roughly equal to Sony in terms of horsepower, and the nature and number of exclusive game titles. There may be some games with features using the advanced Kinect functionality or other Xbox One features that may give Microsoft an edge over the PS4. Microsoft will certainly try to make that point, but we don’t yet know if all the PS4 capabilities have been revealed.
The service comparisons will be important to gamers. Broadly, PlayStation Network and Xbox Live will both offer achievements, connections with friends, multiplayer matchups, and a wide variety media to devour. Pricing models and details of what you get could be a strong differentiator here. Sony may have a rotating supply of free titles, like they do with PlayStation Plus; Sony’s also already strongly committed to supporting free-to-play titles, which Microsoft is just toying with now. Sony appears to have a much more friendly environment for indie developers, and may end up with a broad array of innovative, inexpensive titles that Microsoft won’t be able to match.
Microsoft and Sony may hold back the most important thing fans want to know: How much will these new consoles cost Pricing can be a powerful marketing tool, and announcing a price first gives your competitor a chance to craft a strategy in response. Still, retailers will need to know the price before placing orders, so neither Sony nor Microsoft can wait too long. Don’t be too surprised, though, if we still don’t know the pricing by the end of E3.
One important thing to look for at E3 is the placement given to Sony and Microsoft in the booths of major third-party publishers like Activision, Electronic Arts, and Ubisoft. Will Sony and Microsoft get equal billing, or will one be favored over another Clearly Microsoft and Sony have both been working with major publishers, and we’ve already heard some of the deals. Will Microsoft end up with better placement at third-party publishers, or will Sony Parity should be expected; if one company has better placement with a key publisher, that can be significant boost in the tough holiday market. Of course, the danger for the third-party publisher is picking the wrong console to back, with possibly painful results to the bottom line.
Get your popcorn ready, because the marketing battle will take center stage at this E3.
