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IMC Assignment

Parimal Thakker

PGDM (IB)

Roll No. 62

K.J.Somaiya Inst. Of Mgmt. Studies & Research

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1. Why Halo 3?
The Dark knight, one of the best movies to hit the screens in recent times, with the last
most memorable performance of the Joker by Late Heath Ledger collected around $158 million
in its opening weekend (Friday, Saturday and Sunday), which stands as the highest collection in
all time box office history. This awesome 3 day revenue is matched by Spiderman 3 with $151
million in second place, Pirates of the Caribbean: Dead Man’s Chest with $ 135 million in 3rd
place.

Halo 3, the third and final installment in the Halo trilogy, raked in a whopping $170
million in just 24 hours, and its still going strong. The video game industry is now bigger than the
film industry and will be bigger than the music and film industry put together by 2011, with
Microsoft and Bungie’s Halo 3 leading the way.

Halo is a highly acclaimed videogame franchise from Bungie Studios and Microsoft
Game Studios. It portrays the efforts of the human race to resist destruction at the hands of alien
forces.

The series was launched in 2002 with Halo: Combat Evolved, a first person ‘shoot em
up’ from the perspective of super soldier Master Chief. 2004 saw the launch of Halo 2, which
became the most played game on Xbox LIVE, Xbox’s online gaming property.

The game has gathered a hard core following of fans over the years, known affectionately
as the Halo Nation. The existence of the established loyal fans and existence of cult culture
following meant Microsoft could guarantee Halo 3 would sell well, but what’s interesting is how
the creative strategy could lift the game out of its hard core silo and into mainstream popular
culture.

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2. Gaming Trends.
• Demographic Shifts.

• Who plays computer and video games? – 65% of American Household.

• Coming up next – A society born in gaming.

• Shift in Ages – Change of focus: 18 – 35 year old core male gamers.

• Average age of gamers is 32 years old, with 26% over 50 years of age.

• 40% of US gamers are female.

• The emergence of Social Gaming: 59% of gamers in US play with other gamers
in US.

• Gaming Ubiquity and Connected Gaming.

• Games are enjoyed on an increasingly diverse array of screens.

• More than 70% of gamers in US are online gamers.

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• Next generation is not defined by technology but by connectivity and
community.

• Most recent games are online enabled.

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• The advent of MMOG (Massive Multiplayer Online Game).

• Tales of a User Generation: Communities are increasingly involved in the
expansion of the experience.

• 30% more uploads of user generated content (like maps) than youtube videos in
the first month.

• Create your own levels, share them, monetize them: The first gaming economy.

• Develop it yourself (DIY) initiatives provide development and distribution tools
for independent developers.

• Gamers cease to be consumers and start to become contributors.

• Direct Distribution

• Digital Distribution putting the squeeze o traditional retail.

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• The end of the box? – Gaming is embracing online as potential distribution
medium.

• Entire game libraries are now online – like steam, metaboli, gametap etc.

• Unlocking new business models – Pay-per-click logic, monthly subscriptions,
episode distribution etc.

• Video Game Industry Maturing:

• Gaming is now bigger than DVD’s, BOX OFFICE, Movie Rentals, Books or
Music.

• $34 billion industry worldwide with $11.5 bn from Asia, $11.4bn from Europe
and $10.7 bn from U.S.

• The connection between games and movies is now tighter than ever.

• High profile brains coming from movie industry to gaming industry, like jerry
Bruckheimer.

• Gaming is now powerful enough to generate multimedia franchises.

• Advertising and gaming:

• Videogames becoming an increasing popular means for product placement.

• Marketing Partnerships: Nivea for Men marketing site, In-game advertising
program in ‘Splinter Cell IV: Double Agent’.

• Videogames becoming an advertising channel, eg- Obama campaign 2008.

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• Radical Evolution of how video games are advertised.

• Games moving towards Integrated Communications: Halo 3 was the epitome of
integrated communications.

• Integrated Viral Marketing: Bioshock is an ideal example of a perfect viral
marketing campaign, with newspaper clippings, Wikipedia definitions, eBay
auctions, Old radio recordings etc. to communicate “The Cult of Rapture” spread
real-world evidence that this underwater utopia may have actually existed

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3. Halo 3 Marketing:
Microsoft planned advertising and promotions to appeal to both casual and hardcore gamers in a five-
pronged marketing strategy.

i. Kick off marketing via a television commercial.

ii. Beta test of the game to drive preorders and press attention.

iii. Start of an alternate reality game.

iv. Partner promotions.

v. Final advertising campaign, titled "Believe".

Though Microsoft used forms of viral marketing for promotion (including the alternate reality game
or ARG) the main focus of the company's efforts was traditional media outlets. Because there already was
interest in the title among the gaming community, Microsoft did not feel the need to run a social media
campaign, instead banking on the gaming community to spread the word itself. The focus on traditional
media would help expand the fan base beyond established gamers and convince the public that the game
was a cultural milestone. To build public interest, Microsoft made public statements that Halo 3 would
surpass media sales records, including the July 2007 record of $166 million set by the launch of Harry
Potter and the Deathly Hallows.

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Microsoft's target was to sell 1.5 million copies of the game. Marketing research suggested that the
"Halo faithful" could only be counted on to buy 75% of that amount, meaning that 375,000 copies would
have to be sold to non-fans. Thus marketing goals were to attract an audience beyond the Halo nation, and
to break sales records; in short, to "make Halo 3 and true cultural phenomenon.

• Trailers and shorts

Halo 3 was officially announced via a cinematic trailer rendered in real-time, shown at
Microsoft's press conference at E3 2006 on May 9. Advertising company McCann-Erickson created a
second trailer that was aired only once on December 4, 2006. The video used a mix of computer-created
graphics and live action, computer graphics were produced by Digital Domain and directed by Joseph
Kosinski. 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. The final trailer, shown during E3 2007 on
July 11, consisted of actual campaign cinematics and gameplay.

The first live action video, titled Arms Race, was originally shown at Electronic Entertainment
Expo 2007. It was followed up by another short, Combat, which featured Covenant and human vehicles
and weapons. The final video in the series aired on October 4, 2007 and was used by Discovery Channel
to promote their reality show Last One Standing. The shot ties the events depicted to the beginning of
Halo 3, which begins as the Master Chief plummets to Earth.

• Public beta testing

On April 10, 2007, Bungie announced that a beta test of the multiplayer component of Halo 3
would run from May 16 to June 6, open to select members of the public. Players could enter the beta in
several ways. Testers were selected from those who signed up on the Halo3.com website following the
"Starry Night" commercial or from the first 13,333 players to register after playing three hours of Halo 2
on Xbox Live. Players could also buy a specially-marked copy of the Xbox 360 title Crackdown, which
allowed players to download the beta upon its release.

The public portion of the beta consists of matchmaking play on three multiplayer maps: Valhalla,
High Ground and Snowbound. The public beta also contained a limited version of the "saved films"
feature, which allows players to save and watch their played games. According to Jerret West, global
group product manager, allowing users into the beta created "a psychological investment" in the game.

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"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." The beta caused a spike in preorders for the retail version of
the game.

• Alternate reality game and Viral Marketing

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. A Circuit City advertisement was leaked onto the web days earlier,
revealing the web address of an interactive comic which could be manipulated to reveal the IP addresses
of another series of sites. One website was the home of the "Society of the Ancients" a group supposedly
interested in evidence of Forerunner artifacts left on Earth. Another featured a Forerunner object which
gradually revealed text logs and video clips.

Viral campaign that involved an online/offline scavenger hunt that included, cryptic forum posts,
a fake ad in Best Buy circulars, more cryptic email, and people holding cryptic signs in the streets. The
viral campaign was targeted mainly at die hard Halo fans, people uninvolved with the Halo games
probably wouldn’t get it.

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• Merchandise and promotions

The launch of Halo 3 coincided with the release of various games, action figures, and collectible
toys. Wizkids developed a collectible miniatures game entitled Halo ActionClix which was released on
September 18, 2007. The tabletop game features miniature figures from the Halo universe, including
characters and vehicles. Halo ActionClix figures were occasionally bundled with the game in promotional
packs, and Gamestation stores in the United Kingdom offered a Master Chief figurine to the first 1000
pre-orders of the Halo 3 Legendary Edition.

Several sets of Halo 3-related action figures were produced. In addition to articulated figures
released throughout 2008, 12" inarticulate and more detailed figurines in November were also released.

Microsoft collaborated with other companies to produce Halo-themed merchandise and
promotions at retailers and vendors. Pepsi-Cola created a variant of Mountain Dew called Game Fuel. 7
Eleven sold a Slurpee version of the drink. Burger King announced a special promotion starting
September 24, 2007 featuring Halo designs and characters on food wrappings. Microsoft sponsored the
#40 car driven by David Stremme for Chip Ganassi Racing in the Dover 400 Nextel Cup Series. The

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racecar featured a Halo 3 inspired paintjob featuring the title for the game printed prominently on the
hood and rear bumper, as well as large pictures of Master Chief on each of the rear fenders.

• "Believe" campaign

The last major advertising campaign before and during Halo 3's release was a series of videos
marketed with the tagline "Believe", beginning September 11, 2007. These videos, with an estimated cost
of $10 million, were directed by Rupert Sanders (known for video game advertisements) and made to
depict a generic representation of a single battle in Halo 3. Live-action videos featured elderly war
veterans at the "Museum of Humanity" reminiscing about the Human-Covenant war and the role the
Master Chief played. A "Believe" web site allowed visitors to pan the length of a massive diorama over
1,200 square feet in size and over twelve feet tall, with handcrafted human and Covenant figures
represented at one-twelfth scale. According to Microsoft, the unusual presentation of a model rather than
computer graphics was chosen to look at "the themes that lie at the heart of the Halo trilogy—war, duty,
sacrifice, and most importantly the heroism of Master Chief."

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Character assets from Bungie, including alien models and armor, were recreated and rebuilt for
reuse. The twisted city ruins the diorama is set in were inspired by bombed-out Afghanistan suburbs.
Special attention was paid to creating a photo-realistic setting which was recognizably Halo.

• Launch and impact

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. Microsoft coordinated its own multiple-city launch
parties, and Bungie staff members travelled around the world to host parties. Sponsored launches featured
prize giveaways and chances for fans to play Halo against celebrities and Bungie team members. The BFI
IMAX Theater in London was devoted to Halo 3, while some areas in the United Kingdom cancelled
midnight launches fearing unruliness from the large crowds.

Halo 3 was phenomenally successful upon release. 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. Halo would make an addition $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 the best-selling game of 2007 in the United States.

Critics and publications pointed to the massive marketing and launch of Halo 3 as evidence that
video games had "finally hit the mainstream". Video game critic Steve West of CinemaBlend.com
pointed out the Halo 3 phenomenon as evidence of the mainstreaming of video games, stating that "...Like

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movies, radio, and television before, games are becoming more and more accepted in the popular
culture."

At the PR Week awards Microsoft won the "Technology Campaign of the Year" along with
Edelman for Halo 3's launch. At the 2008 ANDY Awards, the "Believe" campaign won the "GRANDY",
the grand prize. Halo 3's advertising also won five "gold cubes", one "silver cube" and two distinctive
merit certificates at the Art Directors Club Annual Awards Ceremony, most of the awards relating to the
Believe campaign.

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• Versions of Halo 3:

Halo 3 was released in three separate versions. The Standard Edition contains the game disc, manual,
and a small poster with the game's control-map and artwork.

The Limited Edition, contained in a metal case, contains the game disc, manual, poster, interactive
Xbox 360 bonus disc with several featurettes, and a hard cover bound "Bestiarum", which is a collection
of information and art covering the species, cultures, and civilizations of Halo 3.

The final version was marketed as the "Legendary Edition", which contains the game disc, manual,
poster, interactive bonus disc, Bestiarum (on one of the DVD discs), Legendary DVD containing special
content exclusive to the Legendary Edition, and a scale replica of the Master Chief's helmet as a case for
the three discs. The slip-cover packaging unfolds into a large heavy-stock poster of Master Chief.
Gamestation stores in the UK also offered a limited edition Master Chief figurine only available to the
first 1000 pre-orders.

• Halo 3 Spillover effects:

The success of "Halo 3," which is exclusive to Microsoft's Xbox 360, appears to have driven sales
of that console. According to NPD, Microsoft sold 528,000 360s, compared to 500,001 Nintendo Wiis
and 119,000 PlayStation 3s. Analyst for the gaming-prediction market accuse the "Halo 3" blockbuster
sales of cannibalizing the market.

The most curious result was that all other games severely underperformed the prediction market's
expectations, indicating that 'Halo 3' had a substantial negative effect on other major titles across the
board. Games that were especially impacted were the Xbox 360 games "Stranglehold," "BioShock," and
'Madden NFL 08.'

Overall, the video game industry has continued to capitalize on the new generation of consoles.
NPD reported that in the five-week period ending Oct. 6, sales of games, consoles, mobile gaming
devices, and accessories were 9.37 billion U.S. dollars, a 47 percent increase over the 6.38 billion dollars
during the same period a year earlier (a significant figure, but remember that this industry is cyclical, with
the peaks tied to the release of new consoles).

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4. BELIEVE
• Introduction

Halo 3’s ‘Believe’ is a tale of planning to ensure media and creative combined across numerous
channels to tell an epic story. This epic story has helped bring the franchise to a new audience, in doing
so making Halo 3 the biggest entertainment launch of all time. As a body of work this campaign shows us
that the proliferation of media channels is not a challenge for integration, but an opportunity to tell a story
across a bigger marketing communications canvas.

This campaign is an excellent example of how to extend the appeal Halo beyond a loyal hard core
fan base in order to make Halo 3 the biggest entertainment launch of all time. It tells the story of a
campaign that broke industry conventions by reimagining the competitive landscape it was operating in. It
tells the story of a great creative idea extending itself beyond traditional media channels. Halo 3 broke all
entertainment industry records with opening day sales of £84m, more than 110% that of Spiderman 3, the
former record holder.

• Campaign Objectives

The Halo Nation are one of the franchises biggest strengths but provided Microsoft with a classic
marketing challenge, a need to extend the game’s appeal beyond their loyal core audience. Microsoft and
Bungie had a clear business objective of selling 1.5 million copies of Halo 3 across EMEA (Europe,
Middle East and Africa) in the first year after launch.

The Campaign Objectives were as follows:

1. Attract an audience beyond the Halo ation for Halo 3

The launch was at a busy time in the market place, with lots of console game launches trying to
compete with Halo 3. In this context Halo needed to be elevated above the traditional video game
competition with a reframed competitive set.

The aim was to position Halo 3 as a landmark entertainment industry launch, competing against
the Spidermen and Caribbean Pirate’s of this world, not Mario and Lara Croft.

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This thinking led the second objective:

2. Make Halo 3 the biggest entertainment opening day of all-time, exceeding the previous
global record set by Spiderman 3 with £76.5m: make Halo 3 a true cultural phenomenon.

• Towards a Strategic Platform

Xbox needed to reach the people who didn’t like Halo, or didn’t care about Halo, or had never
heard of Halo. And get them to buy a copy. If this was going to happen, the conventions of the category
like irrelevant - loud explosions, pounding music, gameplay footage, guns, blood and gore would merely
reinforce the perceptions people had of Halo.

This called for reinforcing the rules of a video game campaigning and show more characteristics
of movies which is more likely to be a direct competition to Halo.

• Approach

1. Embrace the Halo Nation’s love of all things Halo, & understand why they had such passion for this
franchise.

2. Interrogate this passion to see if it could be spread to a wider audience, once the campaign started
talking about Halo in a different way.

• Learnings:

It was found out from Halo fans that Master Chief was a heroic figure, and the story of this hero
was the main reason they wanted to play this game. He has been the star of each installment and is
Halo’s equivalent of Peter Parker or Harry Potter, a central figure the audience can rally around.

But In campaign's for the previous Halo games the action and special effects have been key
selling points. Master Chief was portrayed as a lead character in a video game, but Halo fans portrayed
him as the hero of a story.

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• Solution:

This campaign would focus on the ‘movie lead’. Master Chief represented 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,
the campaign emotionally engaged them in this potentially epic story that they could come and play a part
in themselves.

• A Strategic Platform

Master Chief the Hero

This thought is based on a clear product truth, and enabled the campaign to flip all of audiences’
perceptions of Halo, turning it from a ‘shoot em up’ into an epic story for the ages. In our culture we
have always looked for Heroes, from Gladiators to football players, the campaigns ambition was simply,
for Master Chief to follow in their footsteps.

The creative task then, was to make people believe in Master Chief as a hero, and believe it in a
way that was respectful and reverential to the history of heroes, imaginary or real, famous or unsung,
within the world that we inhabit.

That task was solved creatively by creating a heroic idea that used every possible channel to add
depth to the story, in doing so blurring the boundaries of the Halo universe and our own – and
commemorating Master Chief’s feats, achievements & heroics from the year 2552 AD: today, all across
Europe, for real.

The Creative Approach – The Museum of Humanity

A virtual space and concept devoted to the memory of the hero Master Chief. Heroes have their
stories told from generation to generation, creating the museum allowed to bring Master Chief’s story to
life. The whole campaign built from this central thought through several phases in the campaign life
cycle.

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• Beyond Integration

Phase 1 - Believe for the Halo ,ation

Although it was required to move beyond the Halo Nation eventually, feeding their hunger for all
things Halo was necessary to build momentum and create a Buzz in the pre launch phase. So a teaser
spot was aired a year before the launch. It ran only once on TV in the 5 key EMEA markets, with internet
promotion preceding the spot making it an appointment to view, and was simulcast live on xbox.com
across the region in parallel to TV airing.

The target consumers engaged immediately with The Starry Night, and on the day of the
simulcast EMEA traffic to xbox.com overtook that to playstation.com for the first time ever.

Phase 2 – Museum of Humanity

Bringing to life the Museum of Humanity meant being smart with media. So, set of principles
were established that could be applied across all markets, regardless of size and budgets. These principles
allowed to bring the Museum of Humanity to life in over 20 EMEA markets in a consistently engaging
way.

• Cinema and TV for epic, emotional launch of the concept.
• Internet as a home for further rich, engaging long format films and interactive content.
• Experiential, in the streets, ambient work to allow consumers to engage with and spend
time with Believe, and to truly embed it into popular culture.

All of the work came from the same core concept, but brought it to life in very different ways.
Not only did the campaign embrace multiple touch points, it used these touch points to expand on the core
concept, not simply repeat it. This added depth to the campaign and made the core story all the richer.

The centerpiece of the campaign was a TV ad that dramatically introduced the audience to the
museum. The ad features the John 117 monument, a hand crafted recreation of a historic battle in which
Master Chief heroically led his troops to victory. Supporting this were more TV and viral films featuring
war veteran testimonials, expanding on the Master Chief folk lore and developing the concept of the
museum. The story also unfolded on the street where statues were erected in honor of the hero Master

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Chief, murals were painted and street plaques were dotted around Europe commemorating fictional
battleground sites. In the UK a war photography exhibition was held in cinemas, showcasing the work of
fictional war photographer Jake Courage. Fans stole many of the picture’s and some were even found for
sale on e-bay.

Phase 3 – Awareness Build & Launch Hype

With the notion of Master Chief as hero now established, and a legion of consumers ready to Believe, the
final phase before launch was focused on maximising buzz, noise & hype in market in the key launch
window at retail. A massive awareness push. Driving reach & frequency in a compressed time period.
The campaign thus moved out of long format AV media, and into outdoor, online and print, to roadblock
the weeks in the run up to the title hitting shelves on September 26th. Simultaneously, a huge PR &
events push drove unprecedented (for a videogame) editorial column inches, throughout mainstream as
well as specialist press, and ensured that the whole world was excited about the Halo 3 launch. On the
night of the 25th September (the day before launch,) Microsoft and Bungie held celebrity film-style
premiere parties, linked over Xbox LIVE & streaming on xbox.com. The PR possibilities of this activity
far outreached anything in the category to date or since – 500 key lifestyle & consumer technology
journalists across EMEA generated over 400 million individual impressions in the region.

• Heroic Results

Recalling the 2 objectives for the campaign:

1. Attract an audience beyond the Halo Nation for Halo 3

2. Create a true cultural phenomenon by breaking global first day revenues for all entertainment
categories

The campaign succeeded in both tasks.

Beyond the Halo ,ation

From analysis of the Halo 2 player fan base, it was predicted that the Halo Nation would account for 1.2
million unit sales across EMEA in the first year after release.

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The Halo Nation as hardcore fans would of course be expected to purchase almost immediately
upon the title’s release – so close to that 1.2 million we were expecting to have purchased by Christmas.
The first hint of our success was when pre-orders for the game passed 1 million deposits across EMEA,
before the game was even on shelves.

By Christmas, EMEA to-date sales were at 1.8 million – a full 20% ahead of the total year’s
target. Another 600,000 Halo Believers. We needed to attract 375,000 new Halo fans to achieve our
targets – but we had added another 600,000 new members to it with our new portrayal of Master Chief as
a hero to Believe in.

Cultural Phenomenon

The mission was to achieve the highest opening day sales ever recorded. The competition were
Spiderman 3 (film), and Harry Potter and the Deathly Hallows (book, just behind Spiderman 3 in total
revenue figures). Master Chief’s new army of Believers were however more than up to the task.

• Global opening day sales were recorded at £84m ($170m in US). This made it easily the largest 24
hours of revenue in entertainment history, at 110% of the old Spiderman 3 record.

• By the end of the first week, £150m had been collected in total – another record.

Xbox doesn’t use tracking research on console title advertising, so they don’t have traditional
measures that show how impactful their campaign was. Luckily the viral success of the core activity
provides Microsoft with evidence that the campaign was popular and engaging. Starry Starry Night, the
pre launch campaign has been watched over 10 million times across sites such as YouTube. The Phase 2
testimonial viral films were viewed over 7 million times in their 1st 24 hours of release, whilst the
Museum of Humanity centerpiece television spot has been viewed over 2 million times online.

• Conclusion

The ‘Believe’ campaign catapulted Halo 3 from an ordinary video game into a worldwide cultural
phenomenon due to its ability to build an emotional rapport with the audience. The innovative stream of
interactive TV, Web and cinema advertisements was an inspired approach that successfully attracted an
audience beyond the typical gamers.

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