Microsoft's Pinata Party

Hey, kids! Xbox 360 much?

Even though Microsoft's (Nasdaq: MSFT) gaming platform has typically aimed for the teen and young adult markets with proprietary combat hits like Halo and Halo 2, there's a little something called Viva Pinata that may soon find a younger audience crowding for game time on the Xbox console.

Yesterday's Wall Street Journal detailed the unique strategy that Microsoft is taking in marketing its kid-friendly title. For starters, the franchise is looking to establish itself as an animated television series before it is introduced to knee-high gamers. Microsoft has teamed up with 4Kids (Nasdaq: KDE) to buy up blocks of time on Fox during weekend mornings. It's a practice that has served 4Kids well; it teamed up with Fox and WB affiliates to launch hit shows like Yu-Gi-Oh!, Pokemon, and the updated version of Teenage Mutant Ninja Turtles.

The premise of the show is as convoluted as many of the other 4Kids programs. Several pinatas live in a lushly landscaped island, all with the sadistic urge to be bludgeoned to belly-busting pieces at your next child's birthday party.

Microsoft wouldn't mind if the show becomes a hit. A handheld game and electronic collectibles of the various pinata species are in the works. There are plenty of other licensing opportunities that open up if the show follows in the footsteps of other 4Kids winners like Pokemon and Yu-Gi-Oh!, which went on to live a bigger life on the multiplex screen.

However, at its very heart this is an Xbox 360 game -- and an exclusive Xbox 360 game, at that -- that is looking to widen the reach of the console by appealing to younger families.

Like taking candy from a pinata baby
Naturally, the game itself is more of an interactive experience than the actual show. Players start in barren gardens that must be cultivated to attract different pinatas. There are baddies bent on snacking on your plants, but they aren't necessarily scary. Attract enough pinatas, and you can start trading them with other players.

Other players? Oh, that's right. The game is perfectly playable on its own, but it's far more engaging when plugged into Microsoft's Xbox Live service, where your garden is one of the many gardens in an active gaming community.

In a nutshell, the game is equal parts of Pokemon, Animal Crossing, and Sims -- tossed in a blender to produce kid-sized smoothies. Back in March, CNET's (Nasdaq: CNET) Gamespot.com began broadcasting a video interview with one of the game developers that seems to position the game for older players who are into role-playing civilization-creating games -- but who are we kidding here? The computer-rendered anime is clearly eye candy for the young at heart, and that's just where Microsoft wants to be when Nintendo (OTC BB: NTDOY.PK) and Sony (NYSE: SNE) introduce their next-generation systems next month.

Mr. Softy's teething pains
Even though many of the flagship properties for Nintendo -- like Mario Bros. and Donkey Kong -- appeal to older gamers, their E-rated simplicity have made Nintendo a popular system with the youngest of gamers. As the top-selling platform, Sony's PS2 also has an audience of all ages, but with its PS3 priced at twice as much as the Nintendo Wii and packing more features for older home-theater junkies like its Blu-ray disc playability, the PS3 is clearly skewing for the older early adopters here. Thus Nintendo is positioned to become the even more obvious choice for younger gamers.

This finds Microsoft with the perfect opportunity to position itself over the holidays as the Wii-substitute. Head out to Gamestop (NYSE: GME) and you will see plenty of available Xbox 360 consoles. Good luck landing one of the 4 million Wii systems -- or 2.4 million PS3 machines -- when they hit retailers next month. Gamestop had a preorder window for the Wii at its stores this past Friday and it was sold out just minutes into the morning. It won't get any prettier once desperate parents start scrambling. There will come a point in which an Xbox 360 bundled and a Viva Pinata game will become a more feasible alternative to trolling auction sites for Wiis or Elmo TMX dolls. It's already reaching out to kids through an upcoming Burger King (NYSE: BKC) promotion with King-themed Xbox games. Well done, Microsoft. You're in their fast food and in their morning television shows. Are we working on a Gymboree clothing line next?

If that fails, Microsoft knows it will always have the older audience hooked with Halo 3 next year. However, there is something unique about the availability advantage of the Xbox 360 over rival next-generation systems. That window will only remain open during the 2006 holiday season. So here's to a successful $50 million Microsoft marketing campaign to makes its 360 matter before the competition begins nibbling away at the next-generation market share. The video gaming market is a big pinata. Let's hope that Microsoft swings the bat well and the sweet rewards come tumbling out.

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Longtime Fool contributor Rick Munarriz does own a 360, but that doesn't mean he won't be in the market to square away a PS3 or a Wii next month. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.