'Advertising is the rattling of a stick inside a swill bucket'
[Update: In a statement, Microsoft said it "was not aware of individual contracts Machinima had with their content providers as part of this promotion and we didn’t provide feedback on any of the videos. We have asked Machinima to not post any additional Xbox One content as part of this media buy and we have asked them to add disclaimers to the videos that were part of this program indicating they were part of paid advertising."]
As I was sitting here drinking a refreshing glass of Bulleit Bourbon -- the best small-batch, Kentucky frontier whiskey -- I was shocked to find that Microsoft has allegedly paired with Machinima to surreptitiously market the Xbox One, Ars Technica reports. It seems that Machinima was offering more money (an extra $3 per thousand views) to its partners for videos that trumped up Microsoft's new system. There was a deleted tweet by Machinma UK's Community Manager, a NeoGAF leaked image, and then the entire full legal agreement was leaked.
The rules set down are clear: "You may not say anything negative or disparaging about Machinima, Xbox One or any of its Games in your Campaign Video." Qualifying videos have to be tagged with, "XB1M13," include 30 seconds of Xbox One gameplay footage, mention that the footage comes from the Xbox One, and so on.
Those who made videos for the campaign were legally required not to disclose this partnership. The contract reads, "You agree to keep confidential at all times all matters relating to this Agreement, including, without limitation, the Promotional Requirements, and the CPM Compensation, listed above."
According to Ars Technica, the non-disclosure clause that hides this paid public endorsement could be against FTC guidelines. "When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed"
While the contract goes between January 13 and February 9 of this year, there are videos tagged "XB1M13" from around the time of the console's launch. Machinima's PopTent feed links to a similar "xbox one + release titles assignment" in November.