Nintendo, Microsoft, Sony Get in the Game - Brief Article

Brandweek, April 23, 2001 by Todd Wasserman

Nintendo has lined up Kraft's Oscar Mayer Lunchables, Frito-Lay, McDonald's and Sports Illustrated for Kids to promote its Game Boy Advance, which bows in June, though retailers have sold a Japanese version for weeks.

The effort for GBA, which can be used as a control for Nintendo's GameCube console release this fall, launches a raft of promotions for Nintendo, Sony Computer Entertainment of America (SCEA) and Microsoft's Xbox.

Outdoor advertising, via Leo Burnett, Chicago, began hitting this month. TV and print will follow for a $20 million spend Tag: Life Advanced.

SCEA, which makes the PlayStation 2 console, has enlisted PepsiCo, among other partners, for a summer effort, a rep said. SCEA partnered with Pepsi in 1999, offering free PlayStation software in an under-the-cap promotion. SCEA has aligned with the likes of Pizza Hut and Nabisco for past promotions.

Microsoft, meanwhile, is expected to announce a deal this week with a soft drink and/or snack company. Though Microsoft declined to name the partners, Coca-Cola would seem a likely prospect except for one possible stumbling block: A multi-year marketing agreement Coke launched in 2000 with Microsoft archrival AOL.

Outside of advertising, Microsoft and SCEA have various media properties they can use to promote their consoles. While Microsoft has MSNBC and MSN, SCEA has the advantage of being owned by Sony, which can place the product in any of its entertainment properties, including Dawson's Creek, Wheel of Fortune or any Sony Pictures Entertainment film. Perhaps realizing this, Microsoft in March signed Norm Marshall & Associates, Los Angeles, to place Xbox.

SCEA, which has been quiet this year, may also have a surprise in store. Richard Doherty an analyst with Envisioneering, Seaford, N.Y., said a price cut of about $100 may be in the cards for PS2, which is selling at about $330. That announcement could come as early as next month.

After an embarrassing shortage last fall of PS2s, SCEA is also telling retailers and third-party developers that it will have enough consoles in stock this time, even if they're in short supply now.

"You still don't see them like you'd like," said Kathy Vrabeck, evp-global marketing and brand management for Activision. SCEA is projecting 7-8 million units by Christmas.

Another sore point for retailers is that Nintendo is cutting margins for its Game Boy Advance release in exchange for a bonus payment later in the year for retailers who sell targeted levels of software and hardware.

Nintendo has also been urging retailers not to use POP from rival gainers who don't yet have a product on the market (i.e. Microsoft). Nintendo evp sales and marketing Peter Main confirmed he sent a letter to retailers recently questioning the POP placement.