Microsoft banks on 'Halo' effect to expand Xbox’s influence in Asia

Speaking to Campaign Asia-Pacific, Rennie Addabbo, the company's general manager for Xbox in Greater Asia, described the campaign as a “huge step forward” in how the technology company has approached launch events.

“We’re really focused on having meaningful engagement with fans to celebrate the global launch of Halo 5,” he said. “It’s shaping up to be most epic video game launch in Asia.”

The Halo franchise is Microsoft’s biggest intellectual property asset under its entertainment division. The new Halo 5, available exclusively on the Xbox One console platform, has already garnered positive reviews.

Collectively, the Halo games have sold over 65 million copies worldwide, grossing almost US$3.4 billion, with fans having clocked over 6 billion hours of gameplay.

Rennie Addabbo

To date, Halo consumer product sales have raked in US$1 billion, this includes more than 12 million action figures and 12 million novels, comics and strategy guides. The total franchise spanning merchandising and licensing, is estimated to be worth around US$5 billion.

Given the competitive landscape for game consoles, where it trails Sony, Microsoft needs the Halo launch to drive a significant rise in awareness and consideration for the Xbox brand. 

Addabbo said the company works with a variety of agencies across markets for marketing and outreach execution. The global creative agency for the Xbox brand is Wunderman.

For the fans

The push to gain customers in the lead-up to the year-end holiday season is riding heavily on the company’s flagship series and the loyal following it has built up over the last 10 years.

In the lead-up to the Halo 5 launch, the company ran a teaser campaign called #HuntTheTruth, with digital, TV and outdoor placements aimed at challenging fans to re-think what they know about the Halo world.

Timed with the global launch date of 27 Oct, Microsoft sent the gamertag of Asia’s most dedicated Halo player “Sandwhichy” into space, as part of a series of launch activities.

Sandwhichy, a gamer in Japan who has clocked more than 10,000 hours in the Halo franchise, saw his gaming achievements displayed on a flag held by figurines of lead Halo characters Master Chief and Spartan Locke on a mission to the edge to space and back.

“I am absolutely thrilled about this opportunity," said Sandwhichy in a statement issued by Microsoft. "I have played the Halo franchise for more than a decade and never thought that I would see my gamertag in space. It literally feels like I’m at the top of the world, a once-in-lifetime experience that I would never forget.”

Fans were also invited to be part of future 'missions' by voting for the coveted in-game items that will join Sandwhichy's name, and Master Chief and Spartan Locke on their journey to Earth’s outer limits.

A one-of-a-kind Master Chief helmet, designed by Taiwanese cosplayer Hsu Chia-Hao (alias Braid Clarke) and Australian designer Jenny Manik Mercian, is also being offered to fans.

Adorned with 25,000 Swarovski crystals and weighing about 5kg, all proceeds from the auction, which closes on 5 Nov, will go to non-profit organization, Make-A-Wish Foundation.

The Xbox team also teamed up with YouTube for an exclusive six-hour live broadcast “Halo 5: Live”.

The broadcast featured exclusive gameplay reveals, celebrity appearances, live interviews with the 343 Industries development team and special documentaries.

The move is intended to connect Halo fans worldwide and allow viewers to watch, comment and virtually participate in multiple launch celebrations being held in key locations including Singapore, Hong Kong, Taiwan, Japan and Australia.

“To date, the campaign has shown that with a rich sci-fi universe like Halo, we can create a cohesive, fully-integrated entertainment experience for fans with the support of multiple teams and agencies around the world,” said Addabbo.

“We set out to make Halo 5: Guardians the most social game campaign ever for Xbox, and are thrilled by the response we’ve seen so far,” he added. 

It’s about the fans … really

China does not feature in the current campaign of on-ground activiation activities, but Addabbo said Chinese Halo fans could tune into the YouTube content and participate online.

The market is an important one for Xbox, home to 515 million gamers, with online PC games the largest segment of China's gaming market, with revenues expected to hit US$16.8 billion this year. Mobile games, the number two segment, will reach US$4 billion.

However domestic adoption has not lived up to expectations. According to Niko, a consultancy focused on the Asian gaming industry, the Xbox One and PlayStation 4 will sell less than a combined and "disappointing" 550,000 units in China in 2015.

Addabbo said the company’s investment in China is and will continue to be significant.

“By 2017, there will be about one billion gamers in China, games are a US$91 billion business globally with 50 percent of that coming from Asia alone,” he said. “The opportunities for cross-play with Xbox and Windows 10 devices which currently number 110 million globally opens up a larger market for us and signals a very exciting future.” 

Addabbo added that ensuring its fans were happy is at “the heart of everything we do.”

“In think in the short-term, how we respond and react to the fan-base will define our success,” he added. “We’ve really made sure that they feel included and have a meaningful connection to the Halo world and it’s evolution, hence the YouTube Live event which had the developers from 343 Industries really going into detail about Halo 5.”

Addabbo claimed that the Xbox One is already enjoying the fastest growth on record compared to previous generation consoles though he declined to share further detail.

“If we do our jobs well in communicating the value proposition we’re offering and sustain meaningful engagement with the fans, we’re confident that that engagement will lead to sales,” he said.

Taking advantage of Halo’s large following takes on added emphasis given cooperative play is a major feature of Halo 5.

“Online gaming has really transformed the gaming experience,” said Josh Holmes, executive producer of Halo 5 in a report by The Globe and Mail.

Halo 5 can be played alone and enjoyed again with up to three others, while Warzone mode, allows for 24 players to play with and against each other in a virtual space.

“It becomes this social bonding experience between friends adventuring together throughout the course of the story,” he added.

Asked about challenges, Addabbo said that ensuring the company produces consistent and compelling content in the months post-launch for Halo 5, would be one.

“We have to make sure that we have engaging content for fans, accessible via a variety of mediums and social channels,” he added. “And tie it all in with our CRM strategy.”

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Hard battle on the hardware front

The Xbox brand faces an uphill climb in recapturing the minds and wallets of console gamers in Asia, and the rest of the world, for its latest hardware.

Sony’s Playstation 4, the only other heavy hitter in the console category, thanks to an earlier release date and wider general availability, has consistently clocked higher sales figures than the Xbox One since the start of this console generation in 2013.

According to figures from VGChartz, the PlayStation 4 has sold 25.45 million units worldwide while the Xbox One has sold 13.88 million.

Earlier this month, Microsoft announced that it would no longer be using or sharing console shipments as a “primary metric for success” in quarterly statements.

Instead, the focus will be on sharing Xbox Live usership and engagement, with the latest figures showing that hardware revenue has fallen compared to last year, but usership has increased 28 percent, meaning 39 million people logged into Xbox Live within the last month.

According to the company’s fourth-quarter earnings report, Xbox Live transactions revenue increased US$205 million or 58 percent, reflecting increased users and revenue per user.

Tein Hee Seow, online editor for Stuff.tv Asia (a sister publication of Campaign Asia-Pacific) said that the launch would definitely create a spike in Xbox One sales within the month itself.

“Mostly, because loyal Halo fans have been waiting for this game,” he added “But it's highly unlikely to topple Sony's PlayStation 4 dominance.”

For one, Seow said, game exclusivity is no longer the biggest draw for consoles, with other blockbuster franchises such as Metal Gear Solid and Final Fantasy available on both Xbox One and PlayStation 4.

He added that the ongoing price war is also making it tough for Microsoft. Sony recently slashed its PlayStation 4 price to SG$539 (US$387.53) in Singapore, whilst Microsoft hasn't reacted to that as it recently reduced its console price to SG$569 (US$408.94).

“In other markets such as Malaysia, Microsoft hasn't officially launched the Xbox One, while Sony has had a headstart since late 2013,” said Seow. “That alone puts Microsoft's console at a huge disadvantage, giving it a lot of catching up to do to match Sony's leading sales number.”

Speaking during a panel at the 2015 GeekWire Summit, global Xbox chief Phil Spencer said that it would be tough to beat the PlayStation 4 in terms of sales due to its big headstart but was confident in the Xbox's solid games lineup.

The focus of the company now, Spencer said, is to gain as many customers as it can with the new features planned and the strength of its own product.

“I'll say we're not motivated by beating Sony, we're motivated by gaining as many customers as we can,” he said.

The PlayStation 4 is officially available in 57 markets worldwide, while the Xbox One is currently only available in 38 countries.

Asked about whether the company had plans to make the Xbox officially available in more markets in Asia, Addabbo said they were always looking at new business opportunities but had no plans at this time for new market entries.