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Microsoft is going all out to sell its new Windows Phone 7 smart phones and Kinect accessory for the Xbox. Rather than going the typical Ballmer commercial route, it's instead spending a cool $1B USD on promotions.  (Source: YouTube/Microsoft)

Windows Phone 7 will launch in early November in the U.S.  (Source: Jessica Rinaldi/ Reuters)
By breaking the bank, the electronics giant hopes to lure in new customers

Microsoft Steve Ballmer is putting his money where his mouth is, so to speak.  In an effort to promote his company's upcoming Windows Phone 7 platform and the $149 USD Kinect hardware extension for the Xbox 360, he is pledging a cool $1B USD in advertising money.

The Redmond software giant has plenty of cash on hand, as showcased by its Yahoo bid in 2008 which involved close to $23B USD in cash equivalents.  The cash comes chiefly from Microsoft's enormously profitable and successful Windows operating system.

Outside the personal computer OS world, Microsoft has struggled to establish itself as a market leader, though.

In the smartphone market, its Windows Mobile market share has languished, being gobbled up by more nimble competitors Apple (iPhone) and Google (Android).  Microsoft tried to revitalize its phone efforts with the launch Kin -- a series of beginner smart phones.  That launch proved a flop, as the phones were pulled off the market only weeks after their introduction.

Last week, Microsoft officially unveiled the finished hardware and software for its new Windows Phone 7 platform.  Despite lacking features like copy, cut, and paste, third party multi-tasking, and hot-swappable microSD memory Microsoft is hoping that customers love its streamlined interface and diverse hardware lineup, consisting of 9 initial launch models from notable names like Samsung and Dell.

Microsoft Xbox 360 has been more successful thus far than Microsoft's phone efforts.  Nonetheless, it trails Nintendo's Wii in number of console units sold worldwide, despite launching earlier than the Wii.  Microsoft hopes its Kinect motion controller, which rivals the Wii's popular built in motion-controller and Sony PlayStation 3's Move accessory will be the extra boost its console needs to overcome its Japanese foe and seize the market's top spot.

Kinect, previously dubbed "Project Natal" will receive half of the advertising money -- rough $500M USD.  The company plans to air ads on Nickelodeon and Disney's websites; the popular ABC "Dancing with the Stars" reality TV show and Fox’s "Glee"; and Time Inc.’s magazines
People and InStyle.

It also plans a Times Square Event, a YouTube page takeover, a Kellogg's cereal promotion, a Pepsi promotion, and a Burger King promotion in support of Kinect and Windows Phone 7.

It has already begun to air a series of new Windows Phone 7 ads, which emphasize the OS's focus on letting you perform tasks quickly and "get back to life".

Microsoft's past advertising efforts have come with mixed results.  Some like the Jerry Seinfeld-Bill Gates commercials were met with confusion or apathy, while others like the "Lauren" 
Laptop Hunters commercial were received much more enthusiastically.

The company vitally needs these new projects to succeed, though, so it seems reasonable for it to invest such a large sum in trying to promote them.  The ultimate question, though, is whether that massive initial investment will pay off in terms of market share, and, in turn, revenue.

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RE: Er...
By geddarkstorm on 10/18/2010 2:05:46 PM , Rating: 2
Shhh, what is this logic you speak of?

On a side note, that picture at the top right of the article makes me wonder if Ballmer has always been an angry bald guy.

RE: Er...
By zaaf on 10/18/2010 2:17:44 PM , Rating: 3
He kinda looks like Peter Boyle, no?

Back to the article, I'm not sure why it's so vital that the Kinect succeed. I think that the 360 has succeeded to support itself. This is a nice addition to the platform but I don't see it as 'vital'.

RE: Er...
By Mitch101 on 10/18/2010 3:36:25 PM , Rating: 3
I cant say this enough I had an EyeToy for the PS2 and it was and still is incredibly fun. Kinect is the next generation of that.

Obivously not everything translates to Kinect but those written with it in mind can be quite fun. More fun than forgetting to hit the button on a Wii when you go through the motions.

Youtube for eyetoy and see some of the things people posted.

RE: Er...
By nikon133 on 10/18/2010 5:13:49 PM , Rating: 2
Both Sony and MS need something for casual gamers (or non-gamers at all).

I recently got Playstation Move and can't get my wife of it. Maybe it's the shape, who knows... ;) I'm hoping it is just a phase but she is already googling for new Move-supported games. She used to game a little bit on PC time ago, but never touched consoles - according to her, Sony controller with 2 analogue sticks is too confusing for her.

Jokes aside, I'm actually happy for her - getting physical in video games is great stress relief, even if it reduces my game-time a bit :)

Coincidently (or not), my colleague's girlfriend is also occupying his PS3 since he got Move. She never-ever played any video games before.

I think that modern controller, cramped with 12 buttons, 2 analogue sticks, D-pad, motion sensors and pressure sensitive keys is a bit overwhelming for everyone but "trained professionals" ;) and as such kills fun factor. Something that complicated simply cannot be fun... right?

So I'm expecting Kinect will have exactly the same effect among 360 owners and their (non-gaming) families and mates. Even more, considering that Kinect has no buttons at all! (Move still is a button-infested gadget, even if it seems to successfully shift attention from buttons to movements).

"It looks like the iPhone 4 might be their Vista, and I'm okay with that." -- Microsoft COO Kevin Turner

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