Microsoft and Machinima Stealth Marketing for Xbox One on Youtube May Violate FCC Regulations

Microsoft’s public perception with the gaming public, which was at an all time high after the initial success of the Xbox 360, began to take a nosedive in that console’s later years, as Microsoft repositioned the machine as a casual media center, and began to focus too much on peripheral apps and experiences instead of core games. Then after last year’s initial Xbox One reveal, it took a beating.

It follows then, that Microsoft wants to reverse its image, but the way it has apparently gone about it is underhanded, sneaky, and even illegal. If true, Microsoft may find itself in a lot of trouble.

Ars Technica reports that a leaked document reveals that Microsoft and Machinima are paying popular Youtube personalities to speak about the Xbox One, preferably positively, at worst neutrally; while endorsement deals like this are far from outrageous, they are usually accompanied by a message or notification that the content is in fact paid for, sponsored, or just flat out an advertisement.

But, the document Ars Technica has specifically says that “video creators may not say anything negative or disparaging about Machinima, Xbox One, or any of its Games, and that must keep the details of the promotional agreement confidential in order to qualify for payment.”

This is a clear violation of FCC rules that mandate that every advertisement or sponsored message is clearly labeled as such, and Microsoft and Machinima may find themselves in a world of hurt if this is true.

Responding to the increasing controversy around the incident, Microsoft and Machinima released a joint statement earlier today:

“This partnership between Machinima and Microsoft was a typical marketing partnership to promote Xbox One in December. The Xbox team does not review any specific content or provide feedback on content. Any confidentiality provisions, terms, or other guidelines are standard documents provided by Machinima. For clarity, confidentiality relates to the agreements themselves, not the existence of the promotion.”

We’ll keep you updated on the story as it develops.