Machinima Charged With Deceptive Xbox One Endorsements By FTC

The XB1M13 scandal was one of the biggest scandals of early 2014. It was a big fallout over the issue of disclosure and deceptive endorsements by the YouTube gaming community. Machinima had signed a deal with Microsoft to promote the Xbox One and various products via various YouTube network partners. The big issue was that in the contract the YouTubers were not required to disclose that the content was paid content. The FTC was quickly notified and began a thorough investigation.

In a press release published on the official FTC website, Jessica Rich, Director of the Bureau of Consumer Protection commented about the issue of paid endorsements without disclosure, stating…

“When people see a product touted online, they have a right to know whether they’re looking at an authentic opinion or a paid marketing pitch,”

 

“That’s true whether the endorsement appears in a video or any other media.”

Machinima was charged with deceptive endorsement practices but they managed to settle with the FTC to avoid any hefty fines.

The FTC let Microsoft off the hook with a warning and stated that the company was quick to rectify the problem as soon as they were notified about the scandal last year. Microsoft cleaned their hands of the event just days after the XB1M13 scandal had been made public thanks to whistleblower Gametegrity who spoke about the leak with Adam Sessler and TotalBiscuit. Shortly thereafter the old media took YouTubers to task for it.

BEST XBOX ONE COMMERCIAL EVER!! XB1M13 XB1M13 XB1M13 XB1M13 XB1M13 XB1M13 XB1M13 XB1M13 XB1M13

YOU SHOULD BUY AN XBOX ONE RIGHT NOW!!!!

According to the FTC, Machinima was paid a hefty sum – and in turn paid out a hefty sum to YouTubers – in order to promote the Xbox One and its games…

“Machinima paid two of these endorsers $15,000 and $30,000 for producing You Tube videos that garnered 250,000 and 730,000 views, respectively. In a separate phase of the marketing program, Machinima promised to pay a larger group of influencers $1 for every 1,000 video views, up to a total of $25,000. Machinima did not require any of the influencers to disclose they were being paid for their endorsement.”

The FTC has been used as a sword by the old media against the rising tide of YouTubers. However, gamers were not satisfied with just YouTubers being required to disclose financial ties and affiliate sponsors in their videos. Gamers took it a step further and organized campaigns to get the FTC to investigate websites where they were suspected of promoting affiliate products and endorsements without proper disclosure.

This campaign was done under Operation Baby Seal, one of the many operations organized by #GamerGate to fight corruption in the media industry.

#GamerGate also requested of the FTC to further explore more thorough guidelines for affiliate links, Let’s Play video disclosures and game review disclosures for both new media and old media alike. The FTC did update their guidelines following the #GamerGate campaign and made it clear that game reviewers in print, digital and video media are required to disclose any financial ties or affiliations with a product.

Some YouTubers still have troubles with disclosure, but for the most part gamers and consumers are being vigilant in ensuring that corruption is brought to its knees at the behest of those who believe in the establishment of consumer protection and justice for all.

Following the XB1M13 campaign, it’s unlikely that Machinima or Microsoft will try anything like that again. And with #GamerGate looming around every alleyway and corner within the gaming industry, you can bet your bottom dollar that anyone attempting to enact corrupt behavior will be thoroughly investigated and suffer the necessary recourse befitting their actions.

(Main image courtesy of Johnny Chase)

[Update: Slight correction was made about the whistleblower]

About

OAG staff consists of writers creating content about video game and digital culture.

9 thoughts on “Machinima Charged With Deceptive Xbox One Endorsements By FTC

  1. Dang, I remember the scandal as it happened (TB sub years before GG) with the $1 for 1,000 views promise. But I was not aware that 2 of their (Machinima) people/partners were paid 15k and 30k, that’s insane. Their views add up to $250 and $730 by the standard promo. Which means Machinima was paid a hefty sum to shadily advertise and they offered a lot to get their top contributors to actually do it.

    Sickening really. But when you think back to MS paying NFL 400mil and 2bil for Minecraft, it shows that all they can do is buy influence, not create.

    MS got off easy since they blamed the PR company and “fixed” it fast. Because they are savy (unlike GameJournoPros). Machinima basically had no excuse since the contract literally said that you could NOT disclose you were being paid.

    Personal speculation time: 15k + 30k + 25k (for everyone else total) = 70k Machinima would pay out. Yes, they could have paid it all out and just made profit on all the ad sharing views, but that is unlikely. So imo, it has to be over 100k they received to do this campaign. Sounds cheap for MS to get some positive press with their new console with the hammering they were getting from their anti-consumer box.

    1. Your calculations are likely correct — a few more people did the math as well and both EA and Microsoft paid out peanuts to reach tens of millions of gamers.

      I’m wondering if the FTC will also publish their findings on the EA and Ronku deal, which also had the same sort of stipulations?

    2. >Complaint levied at Machinima
      >FTC posts full details

      >Actual chance to get ethics discused
      >Shittaku and neogaf presents it as a console war

      >Immediate “MUH M$ BUYING INFLUENCE ITS ALL THEIR FAULT HERE’S A CONSPIRACY THEORY” comments

      >Even though FTC takes this shit incredibly seriously with large companies and would have put M$ on the full fine rape train if it was widespread like Machinima (Who already had sketchy campaigns with EA, Activision and Sony and will require further investigation)

      >Hot Pocketeers on twitter go full console warrior
      >Kotaku successful in sliding narrative away from ethics to full blown console wars

      See, this is why it’s slipped so quick out of the news cycle. It’s now console warrior nonsense instead of actual ethics. So bravo following the media narrative and be a good little shill for whatever brand you market for (Looks like Sony. I can’t say I’m surprised since they are the goodest Goyim), dumb shit.

      Gamergate is above whatever pathetic brand you associate to your pathetic life and doesn’t need dragged down by the various console war retards who enable the press to get away with such blatant promotion.

      1. Good point.

        Machinima was fined and they deserved it. I just don’t feel the need to ignore other parties in the situation. We now know all it takes is less than 200 hundred dollars (for those with less than 200k views) for youtubers to shill. Or 15k if you are a big shot on some network. Who initiated the contract/sponsor deal? If you don’t think that is relevant, sorry.

        I do remember the Call of Duty youtube scandal. But if you want to elaborate on EA and Sony, I’d be interested to read. In fact, maybe people like Usher could add them as links/notes within these articles to better inform the masses in the future.

    3. WORK AT EXTRAORDINARY HOME REPORT………After earning an average of 19952 Dollars monthly,I’m finally getting 98 Dollars an hour,just working 4-5 hours daily online….It’s time to take some action and you can join it too.It is simple,dedicated and easy way to get rich.Three weeks from now you will wishyou have started today – I promise!….HERE I STARTED-TAKE A LOOK AT….gts..

      ➤➤➤➤ https://googlebestjobsworldonlinenetwork/$98/hour…. ⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛

      1. JOBs AT  HOME SPECIAL REPORT………After earning an average of 19952 Dollars monthly,I’m finally getting 98 Dollars an hour,just working 4-5 hours daily online….It’s time to take some action and you can join it too.It is simple,dedicated and easy way to get rich.Three weeks from now you will wishyou have started today – I promise!….HERE I STARTED-TAKE A LOOK AT….fhr….

        ➤➤➤➤ https://googleworldonlinemploymentsparttimework/start/earning/…. ⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛⚛

Leave a Reply

Your email address will not be published. Required fields are marked *

Skip to toolbar