Microsoft could be getting a big bargain in reaching 87 million possible buyers of its Xbox videogame console.
Chairman Bill Gates' company will spend about $500,000 to buy a 30-minute infomercial on MTV, according to a top New York media buyer. The 30-minute spot, scheduled to run on four of Viacom's MTV networks, will be hosted by actor Elijah Wood and will promote Microsoft's next-generation game console.
(MSNBC is a Microsoft - NBC joint venture.)s
The expense is steep for a one-time ad buy but for a company with Microsoft's resources, it's pocket change — not to mention money well spent. MTV reaches virtually every U.S. cable household and will help the company reach its targeted Xbox demographic — young males.
"With the shortened attention spans in this demographic, this is Microsoft's way to get them to concentrate on one thing for a full half-hour," says Andrew Donchin, director of national broadcast at media-buying firm Carat USA. "If you're trying to reach a young audience, you really can't ignore MTV. They really have a stranglehold on that market," he says.
Microsoft is used to spending large sums to push the Xbox, despite the billions in collective losses the company has swallowed to subsidize the console since its introduction. It's also no stranger to unusual and pricey advertising buys. In 1995, it bought out the entire press run of the The Times Of London to promote Windows 95. In 2001, the company said it would spend $500 million promoting the first version of the Xbox.
Microsoft's MTV gambit comes just before its competitors begin talking up their next-generation game consoles. On May 16, Sony is expected to unveil the PlayStation 3 in at the E3 videogame trade show in Los Angeles. And in case you've forgotten about Nintendo, it's expected to show off its next system, the Revolution, at the E3 event, as well.
Microsoft's MTV infomercial should pay off for the company in terms of buzz. In fact, it may have already. There have been countless news reports on the advertising tactic since it broke in mid-April.
Gates recently said that the system should hit retail shelves before the holiday buying season this year. The PlayStation 3 and Nintendo Revolution aren't expected to hit the market before 2006.
In terms of market share, Microsoft runs a distant second behind Sony. According to IDC, the PlayStation 2 is currently in 30.8 million North American homes, versus 12.1 million for the Xbox. Nintendo's GameCube brings up the rear with placement in 9.1 million homes.
"I think that the battleground this time around is going to be much more level," says Schelley Olhava of IDC. "Does the fact that Microsoft is launching [its product] first give it a huge advantage? It may, but there are other factors that determine which console ends up dominant."