Machinima, CPM Deals, and Inside Gaming: Our Perspective

Before we get in to this, here’s our disclosure: Machinima is Inside Gaming’s parent company. Inside Gaming reports on all gaming news stories, regardless of connection or content.

Now then, here’s our stance on the recent stories circulating around Machinima’s promotion deal with the Xbox One. First, the facts.

The Facts

On January 18, NeoGAF user UnluckyKate posted a thread describing rumors that Machinima was running an Xbox One promotion campaign in which they would pay a bonus $3 CPM (cost per mille) to video producers. The videos in question had to hit a certain number of requirements: they had to include at least 30 seconds of Xbox One gameplay, the producer had to verbally mention that they were playing on Xbox One, and the video had to include the “XB1M13″ tag.

The real problem hit later, when a copy of Machinima’s legal agreement appeared on pastebin. The agreement stated that partners were not allowed to say “anything negative or disparaging about Machinima, Xbox One, or any of its games” as well as keep the details of their agreement with Machinima confidential. This wording caused confusion — partners should have been told to make it clear that their content was explicitly promoting the Xbox One while keeping the details of the agreement confidential. I’ve been told that a team at Machinima is investigating why that didn’t happen with this particular contract.

As the news started to circulate, Microsoft and Machinima issued the following statement:

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.

Machinima has since taken full responsibility for the error and will ask all participants to include standard sponsorship language going forward.

Some Commentary

Just to be clear, what follows on is not the statement of Machinima the company, but from Inside Gaming the news outlet.

We’d like to provide our perspective on this issue. First off, this sort of deal happens all the time. It’s simple product placement, and it happens all the time in TV, movies, music, or any other form of media. In fact, just today NeoGAF found another such promotion in which EA directly sponsored YouTubers to make content around games like Battlefield 4, Plants vs. Zombies 2, and sports titles like Madden and NHL. The terms of that agreement are very similar — when it comes to videos about Battlefield 4, they were to show the game’s “leveloution” mechanic as well as avoiding showing the game’s glitches.

To be clear, we’re not trying to distract anyone from the issue or point fingers at anyone else, just drive home the point that sponsored content is extremely common. Someone has to pay for that content, and if it’s not the viewer, it’s going to be an advertiser.

How Does This Affect Inside Gaming?

It doesn’t, due to Inside Gaming’s relationship with Machinima. We all work directly for Machinima as opposed to being channel partners with Machinima. We don’t get paid on a per-view basis, even though it’s our job to make content that people watch. We do not participate in any partnership programs such as the one described in this article. As a result, we operate as an editorial outlet as opposed to an entertainment outlet.

Yes, Inside Gaming is occasionally sponsored, but those sponsor cards are always played before the show and divided from the content itself. We understand that we have a professional obligation to report stories accurately first and entertain second. We always want to be straight and honest with you guys, because we know if we’re not, you’ll just find someone else that is.

We want you to keep watching us. Hell, we even like some of you. Just some though, don’t get too excited.

  1. The “Machinima-Gate scandal…” Twice the Nixon. Triple the carnage!

    But more seriously… If anyone that hears about this story is shocked or confused in anyway, I ask that they carefully climb out of the rock to which they hide beneath and rejoin society. Youtube is the #1 video site perhaps on the planet. And people like to advertise video content. It’s almost brain-dead scientific that advertisers would make contracts with users of Youtube to promote content. So I find that the Internet freaking out over this a bit extreme, whether the Youtube advertiser’s intent with the video was explicitly stated or not.

    *Mind. Blown.*

  2. Question: Lawrence probably answered this but isn’t that how advertising works? Why is this such a controversy now? This has been going on for a while and I’m a little surprised at how the community is reacting to this advertising issue.

    I don’t watch gameplay videos, except for Twitch. If I see a trailer or look up facts about a game, I let that be my judge. If you are the kind of person that watches gameplay, don’t pay attention to the commentator. Just watch the video and let that be the judge.

    • René Mathias Rojas

      Because the many people didn’t see the videos as advertisements and it was more of a construed opinion from different Youtube persona.

      That is my guess as to why they got such a rise out of it.

      • Lawrence Sonntag

        Yeah this is more or less the crux of the controversy. The contracts leaked online were worded in such a way that made it sound like those accepting money had to cover up / not mention that fact. FTC regulations state that one must make clear if their statements are endorsed if they are.

        Machinima has admitted fault in that regard and is working to fix the situation.

        But yes, on a larger scale, product placement is commonplace. I think it’s mostly an issue of people never considering that the YouTubers they trust are producing paid content.

    • I’m not familiar with US laws, but it seems there is something against this type of advertising, not sure, personally I find it’s okay, people who make content get money, microsoft gets exposure, but, who knows.

  3. If I can watch a video and be entertained, I don’t care who’s paying em to make it the way it is. Why should I care if my free source of entertainment has and ad that doesn’t take away from the entertainment itself.

    It’s good to know the Youtubers are getting payed for the amount of work they put in.

    • The problem isn’t in advertising. It’s in “false advertising.” People’s beef with this story is that Youtuber’s failed to mention they were being endorsed to speak positively about a product, rather than give their brutally honest opinions. The idea that these videos are about “entertainment” went out the window the moment economics entered the playing field. People that aren’t too perceptive like to have another’s opinion’s fed to them, rather than exorcise an ounce of brain activity and use logic to arrive at the same conclusion. Everything on Youtube is subject to sleazy advertisements, in the end. If there’s money to be made, there are people to be paid. :/

  4. I don’t get the outrage either, it’s advertising, it happens on TV and now (not exactly ‘now’ it probably did a few years earlier) swapped over to youtube.

    I guess the main outrage stems from people that still board the ‘Microsoft is evil’ train.

    If it was sony in the exact same position we wouldn’t have this

  5. Inside gaming is the best. Love your videos content and the news you provide. Keep up the great work guys.

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