Halo 3 : Heroic Marketing€¦ · story. This is a tale of Halo 3 – the biggest entertainment launch of all time. Halo 3 was a first-person shooter video game developed by Bungie
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MSI-GMP-2011 29 January, 2011
Halo 3: Heroic Marketing
How does a video game shatter all-time records set by the biggest of Hollywood movies? How do
you take a video game of hardcore loyalists to a mainstream audience? This is the tale of such
astounding feats and how to achieve them. This is the tale of strategizing and implementing a
marketing plan by using creative as well as media forces across numerous channels to tell an epic
story. This is a tale of Halo 3 – the biggest entertainment launch of all time.
Halo 3 was a first-person shooter video game developed by Bungie exclusively for Xbox 360. The
game was the third title in the Halo franchise and concludes the story arc that began in Halo: Combat
Evolved and continued in Halo 2. The game was released on September 25, 2007 in Australia, Brazil,
India, New Zealand, North America, and Singapore; September 26, 2007 in Europe; and September
27, 2007 in Japan.
On the day before its official release, 4.2 million units of Halo 3 were in retail outlets. The game
grossed $300 million in sales in the first week alone. By the first week of January, 2008 it sold over 8
million copies. In addition, more than 1.7 million copies were pre-ordered in the United States,
making it the fastest pre-selling game in history.1
The Xbox 360 title beat previous U.S. sales records set by blockbuster openings for entertainment
events such as the release of the movie Spider-Man 3 and the book Harry Potter and the Deathly
Hallows.[1] (Exhibit 3) Halo 3‘s launch was even cited as a primary reason for the failure of the Ben
Stiller movie, The Heartbreak Kid, which opened at the box office on the same weekend.2
1 Microsoft News Center, Oct 4, 2007
http://www.microsoft.com/presspass/press/2007/oct07/10-04halo3firstweekpr.mspx 2 David Davies “U@PLAY: Movie flop blamed on Halo 3 release” San Antonio Express-News, Oct 19, 2007
Sudeep Kumar, student of the XLRI GMP 2011 batch, prepared this case for the course Marketing Strategy &
Implementation. This case study is meant as the basis for class discussion and understanding the field of study rather
than to illustrate either effective or ineffective handling of an administrative situation.
The case makers have tried their best to provide the sources of the information provided but do not owe any
responsibility towards the accuracy of information provided by the sources. The material is not protected by copyright
but please request permission to reproduce this case study for academic purposes by dropping me an email
sudeep.kumar@astra.xlri.ac.in
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Challenges
The Halo franchise had gathered a hardcore fan following over the years due to the success of two
prior games of the Halo franchise – Halo: Combat Evolved and Halo 2. The loyal fans affectionately
called themselves Halo Nation. Around 11 million people had already purchased one or both of the
first two installments. This meant that third time around repeat sales from the existing fan base could
not be expected to be very high.
The Halo team was faced with two main challenges:
1. Attract an audience beyond the Halo Nation for Halo 3: To achieve target sales, they could
not depend only on the loyal fans – their calculations showing that Halo Nation would
account for not more than 75% of the target sales. This meant getting people who didn‘t care
about Halo, didn‘t play Halo to buy Halo 3. The led to the second objective:
2. Make a big-bang launch and make Halo 3 a truly cultural phenomenon: The hit-factory
nature of video game industry meant that the biggest kill happens in the first few weeks
which would be a major chunk of sales.
Xbox 360 and the console wars
Gaming consoles have become very prominent in today‘s world. They are prime means of
entertainment. Nearly half of all US homes own one game-playing machine, and a quarter own
more than three. According to leading consumer and retail information provider, The NPD Group,
U.S. sales of video games, which includes portable and console hardware, software and accessories,
generated revenues of $12.5 billion in 2006. Of this, an estimated $8 billion belongs to PC and
console games industry.
Nintendo, Sony and Microsoft are the key players in the industry. In 2007-08, Microsoft had Xbox
360 and Xbox consoles. Sony offered PlayStation 3, PlayStation 2, & PSP (handheld). Nintendo offered
Wii and DS (handheld). Wii, with its revolutionary controller, was the undisputed leader while the
second spot was closely fought by Xbox 360, PlayStation 3 and PlayStation 2 (refer Exhibit 6 for
market shares). Each of the consoles had options of playing multiplayer games online by subscribing
to those features provided by their respective console makers.
Video game selection remains the most important factor when shopping for consoles followed by
pricing and ease of use. Thus, each of the console makers publishes exclusive games for their
consoles to promote console sales. Other major publishers are Electronic Arts, Activision and
Ubisoft.
Considering the importance of game titles, an important tool is the tie ratio. The software tie ratio
tells us how many games were sold for every console purchased. Put another way, the hardware to
software tie ratio shows how many games a system owner buys on average. A system's tie ratio is
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Total Software Unit Sales divided by Total Console Unit Sales. (See Exhibit 5 for Tie Ratio of
different consoles).
According to ESA statistics, the average game player is 33 years old and has been playing games for
12 years. Many of the industry‘s first-generation gamers (who had begun playing games in their
teens) are now in their 30s and 40s but were still actively playing games. At the same time, new
players are being introduced to gaming at increasingly young age. As a result, the market is growing
with each successive generation.
Marketing of Video Games
The video game industry has become highly competitive. Vast majority of console games are lucky
to sell 500,000 copies. Most titles never break even, and even the more successful ones have a
lifecycle of about six months. The "hit-based" console game business means that the industry churns
out a lot of products each year. It also means that a lot of marketing is done up front in the first four
to six months.
The importance of gaming has moved beyond the marketplace to become a mainstream social
phenomenon. As videogame companies love to point out, the cost of a game/entertainment hour is
the lowest of all entertainment alternatives--except, perhaps, reading a book. This meant that video
games are competing with the entertainment dollars of other avenues like watching a movie or even
reading a book.
Video game development costs above $5 million. The average marketing budget for bigger titles is
also above $5 million. Some go to the extent to say that ―with zero marketing a game will achieve
precisely zero sales.‖ The most effective marketing tool for a video game is word of mouth due to
the behavior of the demographic. Another important thing to understand is that apart from the
traditional media, the Internet is a very powerful tool in marketing a video game. And creativity
tended to be the crucial element of the marketing mix.
Industry experts estimate that Microsoft spent $55 million on the development of Halo 3 and
another $10 million on the Believe campaign as part of the marketing.
Bungie and Microsoft Game Studios
Bungie is an American video game development company founded in 1991. Microsoft acquired
Bungie in 2000, and their then-current project, the first-person shooter Halo: Combat Evolved, was
repurposed into a launch title for Microsoft's new Xbox console. Halo went on to become the Xbox's
"killer application", selling millions of copies and spawning a billion dollar franchise. In October
2007, days after the release of Halo 3, Microsoft and Bungie announced that Bungie was splitting off
from its parent and becoming a privately-held Limited Liability Company named Bungie LLC.
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Microsoft Game Studios is a brand owned by Microsoft and introduced in 2002 to represent the
company as a video game publisher, coinciding with the launch of the Xbox. Games published by
Microsoft under the MGS label are typically released for the Microsoft Windows, Xbox or Xbox 360
platforms exclusively. Microsoft applies this branding to all of its published titles including those
developed by third-party game studios.
About Halo 3
Over its nine levels, Halo 3's campaign concludes the storyline of the Halo trilogy. The campaign
can be played through alone, with two-players on one Xbox 360, or played cooperatively with up to
three other players locally or via Xbox Live or System Link. The game features vehicles, weapons,
and gameplay not present in previous titles of the series, as well as the addition of saved gameplay
films, file sharing, and the Forge map editor—a utility which allows the player to perform
modifications to multiplayer levels.
Halo 3, like its predecessors, is set in the fictional Halo universe between 26th century humanity, led
by the United Nations Space Command, taking place during the year 2552 and finishing in 2553.
According to the backstory, humans developed faster-than-light travel and colonized dozens of
planets before encountering the alien Covenant in 2525. The Covenant declares humanity an affront
to their gods and began destroying human colonies by "glassing"—bombarding the planet with a
barrage of plasma, turning its surface into glass. Despite efforts to keep the Covenant from finding
Earth, a Covenant fleet discovers humanity's homeworld during Halo 2. By the beginning of Halo 3,
the Covenant have arrived in full force on Earth, with most human resistance crushed.
The titular 'Halo' refers to massive ringworlds several hundred kilometers in diameter that are
scattered across the galaxy. These rings were constructed thousands of years ago by an enigmatic
race known as the Forerunners as a weapon of last resort against the parasitic alien species known as
the Flood. In Halo: Combat Evolved, a small human ship fleeing the Covenant stumbled upon one of
these ringworlds, Installation 04. The humans manage to destroy the ring, stopping the Flood once
again; the Covenant, unaware of the destructive nature of the rings, attempt to fire another ring
during Halo 2 in order to fulfill their religious prophecy.
Halo 3's protagonist is the Master Chief, a cybernetically enhanced supersoldier who is one of the
last surviving members of the SPARTAN Project, and one of humanity's greatest warriors. The
Chief fights alongside the Arbiter, a disgraced Elite commander whose race breaks free from the
Covenant.
Halo 3 begins with the Master Chief entering Earth's atmosphere and crashing to the ground in
eastern Africa, where he is found by Sgt. Major Johnson and the Arbiter. In essence, it portrays the
efforts of the human race to resist destruction at the hands of alien forces.
3 Bungie “Ancillary: Halo Story Timeline” http://halosm.bungie.org/story/halostory.timeline.html
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Marketing Halo 3: The Strategy & Implementation
Given the intricacies of the video gaming industry, video game marketing and history of Halo‘s
success, the challenge and the response can be summed up in two statements of the marketing team:
“We were asked to get those people who didn‟t care about Halo; who didn‟t play Halo; or who didn‟t know
about Halo, to buy Halo 3 – a futuristic humans versus aliens science fiction video game. So, we changed the
question from „how do you market a video game?‟ to „how to you honor a hero?‟”
Master Chief as hero4
Chris Lee, global group product manager, took up the thread of how the marketing for Halo 3 was
designed to humanize the game's lead character, Master Chief, and bring in a wider audience than
the adrenaline-soaked core gamers the series resonates best with.
According to Lee, "The marketing statement was really based around Master Chief. We did some
research, and found out that people thought of Master Chief the same way they think of Robocop
and the Terminator, a killing machine... we had to humanize him to reach a broader audience."
Noting that 2006-07 was filled with political, celebrity, and athletic scandals, the creative team
working on the ads reasoned that "there was an opportunity to elevate the status of Master Chief to a
hero." This was accomplished with a variety of ads which show "veterans" of the sci-fi war depicted
in Halo 3 recollecting their fictional memories of Master Chief's battlefield heroism.
Said Lee of the core gamer dilemma, "The challenge we had, and it was identified early on – we
didn‘t have an awareness problem, people knew it was coming out. It was a perception problem...
we wanted to invite people into the console and into Xbox 360 and to play Halo 3 as a mass-market
entertainment product." His advice? "You should find another way to do the message for your
audience." The strategy was clear right from the start: using the launch to create a platform for the
game to take off towards success. However, there had to be a build up to the launch.
While most major game titles begin their campaigns weeks before the launch to build the buzz, Halo
3 differs greatly. A full 16 months before the game‘s launch, Halo 3 was officially announced via a
cinematic trailer rendered in real-time, shown at Microsoft‘s press conference at E3 5 on May 9,
2006.6 The trailer is set in the dry plains of Africa, with the ruins of a space elevator and other
damage visible. The Master Chief is slowly revealed walking through smoke and dust, occasionally
obscured by distorted images of the artificial intelligence character Cortana transmitting a message
composed of portions of the character's lines in the Cortana Letters. The distorted voice of Cortana
was a deliberate clue to the character's predicament in Halo 3. (Exhibit 8)
4 Nutt, Christian “Analysis: Microsoft on the secrets of marketing Halo 3” Gamasutra, Apr 11, 2008 5 E3 (Electronic Entertainment Expo) is an annual trade show for the computer and video games industry
presented by the Entertainment Software Association (ESA) 6 Ocampo, Jason "E3 06: Halo 3 announced, plot details revealed" Gamespot May 9, 2006
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What followed can be classified into five phases of the Halo 3 marketing program. (Depicted in
Exhibit 1)
Phase 1: Starry Night
During Monday Night Football on December 4, 2006, Microsoft hit 7.9 million households (and 1.8
million of its target 18-34 audience) with an eerie spot featuring Master Chief grabbing his helmet
and jumping into the fray. Tag: "Finish the fight."
It showed Master Chief recalling his childhood in the heat of battle. "That really put a human face
on Master Chief," said Lee. "We aired this one time on Monday Night Football one time, nine
months in advance of the launch of the game... It was very expensive... [but] as soon as it was
broadcast it was made available on the web... people watched it once on TV and then again and
again, tens of millions of times," Lee revealed.
The style of the ad itself was designed to not be jarring to the TV-watching audience, eschewing
game graphics for real actors and lifelike CG. However, it worked on another level, as it introduced
new gameplay concepts to a watchful core gamer audience – such as Master Chief's use of the
Bubble Shield, a new defensive item introduced in Halo 3.
The spot, dubbed "Starry Night", was seen by 7.9 million viewers in its broadcast and watched more
than 3.5 million times on YouTube by September 2007.7
Phase 2: The Beta
In April 2007, Bungie announced that fans could win a chance to try out the multiplayer component
of Halo 3 from May 16 to June 6 (later extended to June 10). Players could enter the beta in several
ways:
Those who signed up on Halo3.com website following the Starry Night commercial
The first few thousand players to register after playing three hours of Halo 2 on Xbox Live
Those who purchased specially marked copies of the Xbox title Crackdown
According to Jerret West, global group product manager, "We had a massive beta, and a lot of
people were talking about whether this made sense at all for a game of our magnitude." However,
the beta wasn't necessarily about testing the game's technology, from West's perspective. "We
wanted to drive preorders. For Halo, it's all about day one."
Allowing users into the beta created "a psychological investment" in the game, according to West.
"The idea was basically to make the beta launch huge and let the tastemakers make the launch for
you... to really drive it beyond the gaming press." Thanks to the beta, "we saw a spike of preorders
25% week over week," West revealed.8
7 Hartley, Matt "The play's the thing" The Globe and Mail Sep 22, 2007 8 Nutt, Christian “Analysis: Microsoft on the secrets of marketing Halo 3” Gamasutra, Apr 11, 2008
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In other words, as per Brandweek: Before the beta expired on June 10, 820,000 participants spent
more than 12 million hours of playing online. Using its saved films feature, where you can capture
snippets of gameplay and download it, more than 350 terabytes of Halo 3 data was downloaded
from Xbox Live (which is the equivalent of 82 million music downloads).
Phase 3: Project Iris
A component of Halo 3's marketing was an alternate reality game or ARG called Iris. Alternate
Reality Games, which involve cross-media gameplay and player participation, had been previously
used for the promotion of Halo 2 in the form of the influential and award-winning I Love Bees.
Soon after the Halo 3 public beta ended, a user named "AdjutantReflex" appeared in the official
Halo 3 forums on Bungie.net and began posting ‗secretive‘ to send fans on a quest to know more
about Halo. This was followed up with a fake ad planted in media circulars, to seek out clues via an
online/offline scavenger hunt to unlock new information about Halo 3 and its back-story.
As per a Microsoft spokesperson: "Iris is a spiral campaign designed to take gamers on an incredible
journey through the Halo Universe. Led by an 'unknown' hand, users will discover bits of previously
unknown information about the Halos, the Flood, the Forerunners, and the true origins behind the
Halo trilogy. It's designed to give us more information on how the great conflict all began, as we
build up to the climactic conclusion of the series on 26th September.‖
By August 9, 2007, about 47 days before the launch, over 1 million Halo 3 titles were already sold in
pre-orders in North America alone.
Phase 4: Promotional Partner Activity
Much like movie franchises look to secure key category partners, so did Halo 3. Microsoft
collaborated with other companies to produce Halo-themed merchandise and promotions at retailers
and vendors. Various games, action figures, collectible toys, collectible miniature games were
released in September.
Microsoft lined up a veritable army of marketing partners:
Pontiac, which committed $5 million in media to the game's launch
Pepsi, which created a variant of Mountain Dew called Game Fuel especially themed for
Halo 3
7-Eleven sold the Slurpee version of the drink
Burger King used Halo designs and characters on food wrappings
Other partners included Game Stop, Samsung, Doritos and Comcast
In addition, Halo 3 was the official sponsor of the Projekt Revolution tour that year, featuring
popular groups like Linkin Park and My Chemical Romance which enjoyed huge fan
following with the same category that was Halo‘s audience.
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Phase 5: Believe
Beginning September 11, 2007, the estimated $10 million-plus Believe campaign was the grand finale
to the five-pronged attack that Microsoft had launched a year back. This carefully orchestrated
onslaught intended to elevate Master Chief to epic levels of a real hero thereby making casual fans
interested and core fans rabid. In their own words:
“Speaking to Halo fans they told us that Master Chief was a heroic figure, and the story of this hero was the
main reason they wanted to play this game. Master Chief represents the very tenets of a hero – bravery, sacrifice,
duty, and selflessness. These themes are consistent with the qualities of real heroes, and classic storytelling
throughout history – they are universal and timeless themes that speak to all of us. Instead of telling people about
the action they were going to experience, like most video games, we needed to emotionally engage them is this
potentially epic story that they could come and play a part in themselves.”
The creative task was then to make people believe in Master Chief as a hero, and believe it in a
respectful and reverential way – as they did for real heroes of history. This meant taking the story out
of the virtual world into the real world. Also, it meant taking the story to the whole world.
A week before the Believe campaign, Microsoft re-ran Starry Night ads. Followed by ads
that dramatically introduced the audience to the diorama featuring the John 117 monument,
hand crafted version of a historic battle in which Master Chief heroically led his troops to
victory.
The effort centered on an immaculately constructed diorama9 depicting the great battles of
lead character Master Chief. (Exhibit 9)
The Believe website allowed visitors to pan the length of the massive diorama over 1,200
square feet (110 m2) in size and over twelve feet tall, with handcrafted human and Covenant
figures represented at one-twelfth scale10
With this as a backdrop, warriors that did battle with the game's hero provide testimonials to
his greatness.
Statues were erected in honor of Master Chief (Exhibit 10)
Murals were painted and street plaques were dotted around Europe commemorating
fictional battleground sites (Exhibit 10)
In the UK, a war photography exhibition was held in cinemas
All of the work came from the same core concept, but was brought to life in very different ways in an
experiential nature so that consumers could engage and spend time with Believe. Not only did the
campaign embrace multiple touch points, it expanded them across the globe in non-repetitive
manner.
9 Diorama is a three-dimensional full-size or miniature model, sometimes enclosed in a glass showcase
for a museum, usually used to represent historic events 10
Aditham, Kiran "The Diorama Deconstructed; Modeling mayhem". Creativity, Oct 1, 2007
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The Grand Finale
With the notion of Master Chief as hero now firmly entrenched, and a legion of consumers ready to
Believe, what followed was a massive PR frenzy to drive an awareness push just before the launch.
Some of the highlights were (Exhibit 11):
More than 10,000 retail stores in the United States held midnight launch parties for Halo's
release, in addition to other locations around the globe
The BFI IMAX Theater in London was devoted to Halo 3
Celebrity film-style premiere parties were held and streamed over Xbox Live
All the major newspapers and magazines from New York Times to The Sun covered the
launch and devoted several column inches during the pre-launch hype
The Result The marketing team at Microsoft was able to achieve both the objectives. Halo 3 had gone
mainstream and broken all the records by creating a true cultural phenomenon. The game made
$170 million in US sales on the first day of release, generating more money in 24 hours than any
other American entertainment property up to that point. It would make an additional $130 million
by week's end and sell 3.3 million units by the end of the month. By 2008, Halo 3 had sold 4.8
million units in the United States for a total of 8.1 million units worldwide, making it one of the
best-selling game of 2007 in the United States. (Exhibit 2 and Exhibit 4)
Critics across the mainstream and specialist press appreciated Halo 3 as a game and the marketing
strategy also went on to win several awards for creativity and strategy. (Exhibit 7)
"Halo 3 embodies our vision for the future of entertainment, where some of the world's greatest creative minds
will deliver a new generation of interactive storytelling." – Bill Gates
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Exhibit 1 The Halo 3 Marketing Timeline
04 Dec. 06 25 Sep. 07
May 07 - Jun 07
Beta Testing
04 Dec. 06
Starry Night Aired
Jun 07 - Aug 07
Iris ARG
11 Sep, 2007 - 25 Sep, 2007
Believe Campaign09 Aug. 07
1 million pre-order sales
Source: Compiled by case writers
Exhibit 2 Top Selling titles in 2007 (Americas)
Source: VGChartz www.vgchartz.com
Exhibit 3 Top grossers – Opening Weekends (until 2007)
Rank Title Opening Date
1 Spider-Man 3 $ 151 m May 2007
2 Pirates of the Caribbean: Dead Man's Chest $ 136 m July 2006
3 Spider-Man $ 115 m May 2002
4 Star Wars: Episode III - Revenge of the Sith $ 109 m May 2005
5 Shrek 2 $ 108 m May 2004 Source: IMDB www.imdb.com
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Exhibit 4 Weekly Halo 3 sales
Source: VGChartz www.vgchartz.com
Exhibit 5 Tie Ratio for Consoles (Data up until 2010)
Source: VGChartz www.vgchartz.com
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Exhibit 6 Console Sales (no of units)
Source: VGChartz www.vgchartz.com
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Exhibit 7 Reception of Halo 3 (Reviews)
Aggregate/Review scores
Aggregator/Publisher Score
GameRankings 93%
Metacritic 94%
1UP.com A+
Edge 10/10
Electronic Gaming Monthly 10, 10, 9/10
Eurogamer 10/10
Famitsu 37/40
Game Informer 9.75/10
GameSpot 9.5/10
IGN 9.5/10
X-Play
Official Xbox Magazine 10/10
Source: Wikipedia
Exhibit 8 Master Chief, Xbox 360 console and the Halo 3 logo
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Exhibit 9 Believe Campaign: The Halo 3 Diorama
Exhibit 10 Believe Campaign: Master Chief murals, statues and plaques across the world
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Exhibit 11 Believe Campaign: (a) Movie style premiere for Halo 3
(b) PR event at NASDAQ (c) Promotions at retail outlets
(d) Movie style poster (e) Promotions at the London IMAX theater on launch eve
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