Xbox 360 Marketing Strategy

1. What are the key elements of Microsoft's marketing strategy for the Xbox 360?

Microsoft introduced the new Xbox 360 using a direct-to-consumer approach, putting it in the crosshairs of its target market 4 days before the launch of its competitors. This direct-to-consumer strategy gave the new Xbox an advantage and transformed the game industry's marketing and product development practices. The software giant unveiled the Xbox 360 during a pretaped MTV broadcast, unveiled the Xbox 360 to consumers four days before Sony and Nintendo to become the first to reveal details of a new console. Microsoft "jumping the gun" was a ploy to get advantage from the games foothold it got with its first Xbox, launched in 2001, and to get a jump on its competitors.

In revealing and promoting its new console through nontraditional means with multiple partners and six months before shipment, Microsoft stood to create goodwill with demanding gaming consumers and beyond. Talking to consumers now and bringing the Xbox 360 to stores before the end of 2005, probably long before Sony or Nintendo's new devices, will give Microsoft a big perceived lead in the market.

2. What are the similarities and differences compared to past product rollouts within Microsoft and compared to the rest of the industry?

The direct-to –consumer strategy was very different from how Microsoft normally rolled out new products. Usually the laggard in gaming technology, this gave Microsoft a perceived advantage over their competition. Microsoft's goal was to decrease the sales of both the Xbox1 and the Playstation 2, as well as get an advantage over the forthcoming Playstation 3. Microsoft's competitors limit the company in terms of both price and performance. Therefore, Microsoft had to provide a console that provides customers a gaming experience that is at least as good as its competitors at a price that they are willing to pay. Microsoft needed to offer a similarly compelling platform even though it was coming to market six months sooner. Microsoft has benefited from its competitors' establishment of the video gaming market and the growing acceptance of video gaming as a leisure activity worldwide.

3. Could Microsoft be considered one of the best and worst examples of marketing success in America during the 1980s and 1990s? Discuss.

In 1989, Microsoft passed Lotus to become the world's largest seller of software worldwide. At that time, the company boasted the broadest array of software products and applications as well as the highest profit margin in the industry, at close to 25 percent.