Except for the UK, Xbox isn’t doing well in Europe. This isn’t exactly news, but lately, sales of Microsoft’s consoles have really flatlined in the continent, reportedly leading some publishers to question whether supporting the platform makes sense for them.
Last week, The Verge’s Tom Warren reported a rumor that Microsoft was seriously considering winding down marketing efforts for Xbox consoles in certain EMEA (Europe, Middle East, and Africa) markets to focus solely on Game Pass, its subscription service.
Now, Xbox EMEA Marketing Director Michael Flatt has openly spoken about getting much fewer funds than Sony’s PlayStation division. In an interview with Marketing Week, he said:
From a funding point of view, we need to work really hard against our competition. Regrettably, they (PlayStation) outspend us. They’re blessed with marketing funds that we’re just not able to enjoy. But that’s totally fine. We adopt what I would call a more fiscally responsible approach to media investments. We’re not blessed with huge media budgets, so we have to be quite scrappy really, and quite tenacious to fight for funds that would probably go somewhere else.
Needless to say, hearing a marketing lead of a Microsoft division talking about having to be scrappy will raise a few eyebrows. After all, Microsoft is a $3.25 trillion market cap company, currently the second in the world after Apple, although the two have traded spots a lot recently.
Moreover, Microsoft has spent a lot of money in the past few years to acquire publishers like Bethesda for $8.1 billion and Activision Blizzard for $68.7 billion. Why wouldn’t they market Xbox appropriately?
Well, it is a bit of a chicken and egg problem. Microsoft probably has evaluated that there isn’t enough interest in the consoles, so spending more money on marketing would be futile. Then again, if the Xbox EMEA team had a bigger marketing budget to begin with at the start of the generation, perhaps things could be different now. Either way, it’s certainly a bit odd to see an executive speaking plainly about being underfunded.
Xbox is certainly in a tough spot in Europe right now. Will they try to stage a comeback or throw in the proverbial towel, at least when it comes to marketing? Let us know your opinion in the comments.
