The video game content streaming company Machinima has agreed to settle on the Federal Trade Commission’s (FTC) charges that they engaged in acts of “deceptive advertising” for Microsoft.   


XBox One


In 2014, the media streaming company was accused of taking money from Microsoft to help with a marketing campaign to promote the Xbox One. It was later found out that Machinima gave over $45,000 to popular YouTube channels to say good things about the Xbox One and its games through video reviews. This created outrage from their fans because they failed to disclose that what they were saying wasn’t their authentic feelings. Why does it matter that they didn’t admit it was an advertisement from the start?


“When people see a product touted online, they have a right to know whether they’re looking at an authentic opinion or a paid marketing pitch,” said Jessica Rich, the Director of the Bureau of Consumer Protection.  


When most viewers watch a video game review, they expect to hear opinionated statements that will help them to decide if they would like to purchase the game or not. If the video’s producer is paid to spread a positive message about the game, the audience would want to know so they can decide if they still want to hear out the pitch.


Microsoft isn’t facing the same FTC charges or public criticism as Machinima, since the company stated that they were unaware that the media streamer paid “influencers” to produce positive reviews. They have also ended their advertising relationship with Machinima after news of their marketing practices were made public.    


“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,” said a Microsoft spokesperson.  


The FTC has prohibited Machinima from using similar advertising practices in the future. More guidelines are starting to be put in place that requires content creators to identify their work as an advertisement if their message is controlled by a paying advertiser.        


Did your view of Machinima change after you first heard the charges? Should content creators have to disclose that they are paid by advertisers? Leave a comment or talk to me on Twitter @Karbowski_Devon.