The Xbox was originally released in 2001 and Xbox Live was launched in 2002, allowing online multiplayer gaming. Halo 2 became the highest grossing entertainment product ever upon its 2004 release. The Xbox 360 was released in 2005 and grew Live subscribers to 3 million by 2007. In 2008, Xbox had its best year yet with over 28 million consoles sold, outpacing the PS3. A new dashboard and Netflix were added that year. While the gaming market grew 50% from 2004-2006, the Wii outsold Xbox starting in 2007. However, Xbox maintained the second best selling console position in North America through 2008.

1. XBOX
...jump in...

2. Product Background
• Original Xbox released 2001 in North America
• November 2002: Xbox Live launched allowing subscribers to play online
with others around the world as well as access to downloadable content
• In 2004 Halo 2 becomes the highest grossing release in entertainment
history making over $125 million in its first day
• Xbox 360 released on November 22, 2005
• July 2005 Microsoft announces one million Live subscribers
• By July 2007 the membership had
increased to three million
making it a very popular
gaming service

3. Product Background Cont’d
• In 2008 Xbox experienced biggest year
– Life to date sales rose to 28 million
– Lead competitor PS3 by more than 8 million units sold
• New Xbox Experience launches November 2008
– Makes navigation easier
– New community system
– Ability to install games onto the hard drive
- Netflix feature launches; holding over
12,000 movies and TV shows
available to buy or rent
in DVD/HD quality via download

4. Video Game Console Market
• 2004-2006: industry increased by 50%
– Growth attributed to increased hours of gaming
• Main competition: PS3 and Wii
• Experienced decline following the release of Nintendo Wii in 2007.
– Outsold every month
– Sales decreased by 33.6% in 2007

5. VG Console Market Cont’d
• 2008
– Market dominated by Wii
– Top 3 Consoles; Xbox ranks 2nd in total console sales to date, starting in
January 2008 (North America)

6. XBOX Live Demographics
- Gender - Income
- 69% Male - 48% have household
income > $30,000
- 31% Female
- 26% have household
- Age
income > $50,000
- 55% age 18-34
- 31% age 35-44

7. XBOX Advertising Promotion

8. “Jump in” Ad

9. McClelland’s Trio of Needs
– Strong need for achievement:
regard
• Power
personal accomplishment as an end
– Fulfills desire to control environment
in itself
– Controls others and various objects
– Egotistic need
– Relates to ego; self esteem
– Self actualization need
• Affiliation
– Affected by friendship, acceptance
and belonging
• Achievement

10. Consumer Information Processing
• Ad uses a peripheral route to
persuasion
•Peripheral cues are used
•Leads to learning and discovery
•Viewer’s focus on elements given
•Attitudes or product choices are
quickly formed

11. Uncovering Consumer Needs
Using Laddering
Functional Psychological Underlying
Product Attribute
Consequences Consequences Needs
Feeling of
Available Competition
accomplishment
Online Capability
Interact with people
Social Networking Need for affiliation
over the internet
Functional, Appealing ease and comfort of user is more capable
and Ergonomic Design use enjoyable to use
Xbox 360
Feeling of
Achievment System Aquiring Achievments Need for achievment
accomplishment
Need for power and
need
Downloadable Media More appealing to
access to HD content Ego needs
prestige
(Netflix) watch
more features, and
Next Gen Console user is more capable
controls

12. Questions?
Thank you!

13. Sources
• http://www.researchandmarkets.com/reportinfo.asp?cat_id=0&report
_id=544281&q=Video%20Game%20Market&p=1
• http://www.roughlydrafted.com/2008/01/31/video-game-consoles-
2007-wii-ps3-and-the-death-of-microsofts-xbox-360/
• http://advertising.microsoft.com/gaming/xboxcom-
advertising?tab=overview
• Schiffman, L.G., Kanuk, L.L., & Das, M. (2006). Consumer
Behaviour. Toronto: Pearson Prentice Hall.
• http://videoonlinegames.suite101.com/article.cfm/xbox_360_options
_on_the_market
•