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As an industry, video games fall in a fascinating intersection between entertainment and tech. It’s a lucrative field, with $3.5 billion spent by consumers on video game content from new titles to hardware in the first quarter of 2013. It’s also a field where the customer base is very active online, with a thriving community of online publications, reviews, forums, and social media discussions.

This year marks an especially exciting one for video games because two of the hardware providers are releasing the next generation of consoles. Microsoft makes the Xbox One and Sony is the brains behind the PlayStation 4, or PS4. The two companies have always been rivals fighting over the same audience, but this is the first time they’ve rolled out new consoles while social media is a top channel for conversations among gamers about gaming.

How did the social media conversations unfold? What were the social strategies of each company? And how might those discussions impact sales once the new products arrive on the shelves this fall? Let’s take a look.

Sony: Using Social and Spectacle to Further a Rivalry

Sony Greatness Awaits

The meat of the console wars on social media occurred during E3, the Electronic Entertainment Expo, in June. Microsoft’s presentation included some unwelcome news for hardcore gamers: the Xbox One needed to check in online once a day and the company had restrictions on sharing game discs and playing used games. When Sony took the stage later that same day, it leapt on those points and won the social media support of the hardcore audience.

Going negative about a competitor on social media is a risky move that most often backfires. Companies should be 100 percent certain of their customers’ responses before taking this marketing tactic. In the console wars, Sony saw the ideal opening for improving the reputation of its own product while making a dig at its rival.

During E3, the official PlayStation Twitter account posted several tweets about its policies that catered to the priorities of hardcore gamers, including two about sharing and used games. The first received 1,992 retweets and 731 favorites, while the second saw 6,820 retweets and 2,029 favorites. Next followed three tweets about how the PS4 would not require regular Internet check-ins. These posts were retweeted 7,458, 3,382, and 3,672 times. They were also highly favorited: 3,001, 1,151, and 1,437 respectively. None of the tweets mention Microsoft or the Xbox One by name, but by blitzing social media channels with tweets clearing distinguishing its approach from the unpopular decisions of the competitor, Sony generated a huge swell of positive feedback.

Sony capitalized on its positive word of mouth following E3 with the release of an excellent video ad. The campaign, titled “Greatness Awaits,” shows an actor addressing the viewer as an elaborate panorama of video game tropes and in-jokes are performed behind him. The monologue explains all the power that is at a video game player’s disposal in elegant rhetoric.

It was a striking spot that has more than 11.54 million views on the official PlayStation YouTube channel as of this writing. Not only is the ad a success for its excellent writing and visuals, but for how Sony tailored it to become a source of YouTube engagement. Clicking a link in the video’s description takes the viewers to an interactive screen where they can rematch the spot and hunt for the Easter eggs embedded in the production. These hidden clues are related to the PS4’s exclusive game titles and unlocks special rewards for the players.

For example, one of the first Easter eggs reveals two pieces of computer wallpaper art for the title Transistor. Another lets viewers bid on some of the props and items used in making the ad. According to the data displayed in this enhanced video, more than 639,000 unlocks have been made. That means thousands of people have participated in the game, helping to build additional interest and excitement about the brand experience.

Despite the huge success of this formal ad spot, Sony’s most popular YouTube video is another dig at Microsoft. The “Official PlayStation Used Game Instructional Video” clocks in at less than 30 seconds, but has garnered just shy of 14 million views. Sony’s leaders upend the traditional branded video promotion with a humorous take on its open sharing policy, which was the central negative in gamers’ reactions to the Xbox One.

Competition is an integral part of video games. Whole genres are built around pushing yourself to play better, to beat out friends, enemies, time, or your own skill. Everything about Sony’s take on social media promotion tied in to the attitude of gaming, and that won them the support of the demographic.

Microsoft: Seeing Beyond the Echo Chamber

Xbox One unboxing

The events of E3 and the overwhelming support for Sony’s console left Microsoft in an uncomfortable situation. Its policy decisions about online connectivity and sharing games created a negative response within the very demographic it wanted to bring closer into the fold. Shortly after E3, the company reversed some of those policies.

What followed is an example of how to ride out a wave of negative sentiment on social. The policy reversal led to #Xbox180 as a trending tag on Twitter, but that didn’t alter the company’s approach to social media. The official Xbox Twitter account is active in engaging with its fans. The brand’s feed routinely reaches out to gamers with open-ended tweets asking about what they are playing, or responds with people mention having preordered the console.

Rather than fight fire with fire, the company kept its head down and focused on strengthening its existing fan base, interacting with those customers and answering questions on Twitter. Churning out as many as 40 tweets at fans an hour, the Xbox team has shown a dogged approach to staying positive in its social media strategy.

The reason this worked requires a broader perspective. Much of the negative press was concentrated among websites devoted to serious gaming and the Twitter accounts of vocal gamers and industry writers. As this subset of console customers reacted and shared each other’s reactions, the negative response created by the echo chamber appeared to grow. By reaching out and making an incomplete appeal to the audience that is more vocal (and more vitriolic) on social media, the response to the Xbox One for hardcore gamers appeared heavily skewed toward the negative, even though the product’s core audience appeared to have few concerns about the issues that sparked an uproar in the gaming community.

Much of the coverage of the new consoles outside the core gaming media — such as in business blogs and mainstream journalism — has taken a more long-term view of Microsoft’s initial decisions. Articles in The New York Times, VentureBeat, and The Washington Post were able to deconstruct the rivalry with less bias, and offered explanations as to why the Internet check-ins, the new stance on used games, and the different audiences would likely not spell disaster for Microsoft.

Microsoft’s social reach may be smaller than Sony’s — the Xbox Twitter feed has just over 1.77 million followers compared with PlayStation’s 2.42 million — but the attitude of the company is more friendly and conversational. Don’t assume that you have to match the strategy and tone of a competitor in order to succeed. No matter what the business decisions are, stick to the social strategy that suits your fans and your brand. Since Microsoft has a customer base that includes the range of casual to hardcore gamers, the inclusive approach to social is a good tonal match.

From Social to Sales

video game sales

While social media buzz can play a major role in influencing the public opinion about a product, the more pressing question is how it impacts sales. Even though Sony’s social strategy garnered an explosive positive reaction from gamers, analysts have not declared the PlayStation 4 the undeniable winner.

Baird analyst Colin Sebastian issued an investors’ note in late July noting that the figures may actually favor the Xbox. “Despite losing the headline battle at E3, Microsoft’s Xbox One appears to be regaining some momentum, in part due to the used and online policy tweaks,” he wrote. “Importantly, our supply chain checks suggest Microsoft may have the benefit of a 2-3x unit advantage at launch compared to Sony’s PS4.”

No matter what the totals are in terms of pre-orders and initial sales, history tells us that the long game will probably see a draw between the new products. According to VGChartz, as of May 2013 the total global sales for PlayStation 3 totaled 77,313,472, compared with 77,311,669 for the Xbox 360. Considering that console generation had wildly more positive response for the Xbox 360 at launch, it seems possible that the market will balance out sales for the Xbox One and PS4 over the lifespan on the new hardware.

VGChatrz noted that price cuts, a redesign, and new game titles helped propel the PS3 to a stronger performance in its later years — all similarly tailored to address initial consumer complaints. Microsoft could take a similar approach with the Xbox One, dropping the $499 price tag down the road and building a strong lineup of exclusive games.

What Companies Can Learn From the Console Wars

Playstation v Xbox

The console wars offer a few lessons for companies engaged in a head-to-head rivalry. First, know your audience on more than a superficial demographic level. Gathering analytics about the ages, genders, and locations of your social media followers is easy enough, but the key to leveraging that raw data into a dedicated customer base is to deliver what those people want from your brand.

Sony’s message has consistently been that PlayStation is the choice for serious gamers, and that has been reflected in its social strategy. Much of the promotion for the PlayStation 4 focuses on smart, empowering video content. The “Greatness Awaits” ad encapsulates the mindset and attitude of hardcore gamers, both in the tone and in the addition of interactive layers in the video.

Even consider the choice of YouTube video as the top driver of the advertising program: the emphasis on video content makes the promotional materials feel more like being in a video game than like watching an ad. By delivering the type of marketing and the insider content that its core audience best responds to, Sony has attracted more than 1.87 million subscribers to its PlayStation YouTube channel.

On the other hand is Microsoft and the Xbox One, which has more traditionally been a family-focused console. The top video content for the Xbox One is more educational and straightforward than the glitzy approach of a well-produced ad. The brand’s “Unboxing Xbox One” video has more than 2.43 million views, and views of the “Xbox One Unveil Video” exceed 6.3 million. Especially when customers may have been confused about the changes made by the company in the months after the initial unveiling, the brand responded by releasing content that centered on hard facts about the console.

Both consoles will be available to customers later in 2013. Watching the social media response this fall will certainly be educational about how these products may fare in the long run and how well the brands can stick to their social guns.

[Image credits: Charli White, Stephan Mosel, -EMR-]