The holidays are fast approaching. Sure, we may be just on the verge of gearing up for summer, but the video-game industry doesn't have much time. All of the companies have to plan now for their big promotions. This is especially true for Microsoft (NASDAQ:MSFT), which needs to reach killer-app status with its upcoming, next-generation system Xbox 360, due in November 2005.
Bill Gates' marketing minions have come up with a rather interesting promotion that not only wants to increase brand awareness of Xbox 360 but also seems to have a viral-marketing component as a subtext. In conjunction with PepsiCo's (NYSE:PEP) Mountain Dew soda, Microsoft will give an Xbox 360 away to a lucky winner every 10 minutes for nine weeks; the contest is scheduled to begin in late August.
Let's do some arithmetic: Six per hour times 24 hours per day times 63 days equals 9,072 free systems to be had. That's actually a pretty cool little contest. What's also cool is that, although the press release doesn't detail how soon the units will be in the hands of the winners, they will still be awarded before the general public can purchase them. If the system is a hit with those who score a free 360, then the friends of these serendipitous individuals will surely be aware of the 360's power and will be primed to buy one.
Although I like the idea, a bit of fine-tuning occurred to me as I really mused on what the company was trying to do here. Giving away a bunch of systems is a great way of spreading the word, but the best people to award the system to before it hits retail shelves would probably be longtime, hardcore users. Targeting Mountain Dew fans is definitely targeting the correct demographic, but Microsoft should maybe have concentrated on giving the systems to, as an example, subscribers of video-game magazines who have been with the periodicals for a significant amount of years. Courting a more definitive set of trendsetters at the beginning is certainly desirable (in addition to the practice of distributing gratis copies to key industry members). A general contest like the one discussed here could have then arrived around the time of the launch date.
This led to another thought, one directly inspired by a very provoking notion proffered by W.D. Crotty last year: What if Microsoft gave the Xbox 360 away in a bid to generate a significant installed user base as quickly as possible? The concept of giving away game consoles (sans contests) to create a market for high-margin software is intellectually fascinating but probably could never work for a whole host of reasons. Besides fundamental economic issues, how would a consumer perceive a free machine?
No matter what, though, the Xbox 360 is in good hands with the Mountain Dew brand. Microsoft hopes to capture a lot of mindshare from Sony's (NYSE:SNE) PlayStation fans this fall, and PepsiCo hopes to be cooler than rival and Motley Fool Inside Value recommendation Coca-Cola (NYSE:KO). Don't worry, though; I'm sure the folks at Coke will be working the new consoles at some point in the future.
Related Foolishness:
- Attack of the Consoles
- Microsoft and MTV Hang Out
- Pepsi's Sweet Numbers
- Carrying out Pepsi Bottling's Plan
We also have the Microsoft and Pepsi discussion boards at your disposal.
Fool contributor Steven Mallas owns shares of Coca-Cola. The Fool has a disclosure policy.
