Challenged with improving controller sales through our online customization site, Xbox Design Lab, we initially thought the solution was to follow the traditional advertising value exchange. But by developing a clear understanding of our consumers’ motivations and lifestyle, we created a new value exchange model.

To do that we introduced an innovation that no one had ever attempted before: to reward them with fame, promotion and ownership of their design, and income from it. We created a new functionality in the Design Lab experience which become the core mechanic of the idea: we enabled gamers to take ownership of the design. All the gamer had to do was be the first to use a particular combination, and they could take ownership of that design via the Design Lab site. This meant they were credited, they could name it, and most importantly: the more people who bought it, the more they could earn from it. We called them ‘Fanchisees’.

The ‘Fanchise Model’ turned thousands of gamers into designers and entrepreneurs. It recognised and rewarded the personal investment they made when they designed a controller. Our audience felt smart, creative, industrious and entrepreneurial, whilst designing and promoting Xbox products for mutual benefit. The idea created a self-fuelling ‘virtuous vortex’, ignited by rewarding people to make and promote their own designs, attracting others to do the same, who in turn attract others.

With this new model, it created a win-win situation . Xbox generated a 350% uplift in sales and the campaign delivered a ROMI of 27:1. We increased our conversion rate by 47%. But our consumers won too. The average pay-out earned was $95.24, and the top earner made $1131, more than 14 times the cost of their original controller. Therefore, Fanchisees saw an average personal ROMI of 1.19:1, with one top-earning individual therefore achieving 14:1 ROMI.

The Fanchise Model represents the creation of a totally new way to create an effective campaign in the modern digital economy. The success for both business and customer is a direct result of the move from ‘banging our own drum’ to a new model for advertising, built on a reward-based value exchange. And crucially, in the words of our senior client on the Xbox Design Lab business “This campaign not only delivered for us commercially, it also supported our mission to empower Xbox gamers to do more.”