December 21st, 2008

Microsoft Wants You to Throw a Party for its Xbox

By Theresa Howard
USA Today

On a recent Saturday, about 1,000 women across the country moonlighted as marketers for Microsoft’s newest Xbox services.
House cleaners, hairdressers, guidance counselors and IT technicians got a $150 pack of Xbox freebies for opening their homes to at least 10 friends or relatives.

And they earned bragging rights.

“It’s cool because the kids in my school were like ‘oooh,’ “ says Aimee Maldonado, 40, a guidance counselor at a high school in Yonkers, N.Y. “They think I’m so cool.”

She was among the first 10,000 people in the U.S. to try a batch of new Xbox Live Internet-based games and services, which include streaming video, movie rentals from Netflix, as well as photo-sharing and other social-networking features and shopping.

Microsoft signed up Maldonado and the others to drum up interest among women like them in the services and the newest Xbox console, whose price was cut in the fall to $199.

“We’ve sold 20 million consoles to date globally since we launched three years ago,” says Heather Snavely, Microsoft’s director of interactive entertainment business global platforms. “In order to get to the next 20 million, we need to get a new audience of women and teens. We’re going after them in ways that are different than ways we’ve done before.”

The Xbox event hosts used their own Xbox 360 consoles to demonstrate the new services, which also require broadband Internet service and subscriptions to Netflix and Xbox Live, a service that offers social-networking activities and game play with friends in other cities.

They got an Xbox party pack of freebies that included microwaveable popcorn, Xbox trivia game Scene It? Box Office Smash, an Xbox universal media remote control, a three-month subscription to Xbox Live, and 1,600 Xbox Live points (used for game, movie and TV show purchases).

Xbox found women including Maldonado and Chicago-area resident Danielle Jamil through a service called House Party, which sets up home parties for marketers. House Party has a database of 100,000 names of people who have provided a profile of personal information and who want to be “brand advocates.” The advocates host a preplanned party to show off the marketer’s brand to their friends.

“It’s a tremendous opportunity in terms of building a brand,” says Jamil, 36, a manager at a marketing firm who lives in Downers Grove, Ill. “People trust their friends more than they trust an ad or a commercial.”

Marketers pay House Party from $120,000 for holding 1,000 parties to $300,000 for up to 5,000 parties. The marketer’s only additional costs are for such incidentals as the sample box for hosts.

Microsoft was one of the 43 clients for which House Party orchestrated events this year. Others included Fisher-Price, Kmart, Kraft, Poland Spring water and Clairol. Next year, the company has more than 85 parties lined up.

Based on the profiles, House Party picks people most likely to talk about a brand or service and settles on a group of hosts for the client marketer. “We’re trying to get authentic enthusiasm going,” says CEO Kitty Kolding. “We know that word-of-mouth is far more valuable and has more impact when the person delivering the message has a real passion for the product.”

To get picked to host a party for 10 to 20 guests, women who own an Xbox had to answer questions about how active they are on social-network sites such as MySpace. Selected hosts then received weekly e-mails with party tips and reminders leading up to the event.

Kolding says the company tries to work the list so the same people aren’t always picked. “We try to gather a whole new group of consumers every time we do an event,” says Kolding. “We don’t want serial hosters.”

Shannon Arnett, 30, of Batavia, Ohio, was excited to be picked as an Xbox host.

“We have the older Xbox 360,” she says. “When it first came out, (the games and services were) more geared toward the men. Ö Now, Xbox is trying to bring everyone together.”

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