The advertising arrangement between Microsoft and Machinima under which Machinima paid a bonus to YouTube producers who highlighted the Xbox One was a "typical marketing partnership," said Machinima and Microsoft in a joint statement issued to Polygon.
Under the deal, Machinima offered a $3 CPM bonus (an extra $3 per thousand views) to individuals who posted videos on YouTube that featured at least 30 seconds of Xbox One gameplay footage and verbally mentioned the game was being played on an Xbox One. The videos could not contain anything negative about the Xbox One, its games or Machinima.
It appeared that the terms of the agreement prevented those video producers from mentioning that they were being paid to promote the Xbox One, but according to the statement from Microsoft and Machinima, that's not the case.
Here's the full statement: "This partnership between Machinima and Microsoft was a typical marketing partnership to promote Xbox One in December. The Xbox team does not review any specific content or provide feedback on content. Any confidentiality provisions, terms or other guidelines are standard documents provided by Machinima. For clarity, confidentiality relates to the agreements themselves, not the existence of the promotion."
That is, the producers could not disclose the specific terms of the promotion — the program was capped at 1.25 million total views, so the maximum combined payout was $3,750 — but they were free to mention the connection to Microsoft and Machinima. Thus, neither the companies nor the content creators would have run afoul of the U.S. Federal Trade Commission's guidelines for endorsements in advertising, which require a product's endorser to disclose a connection to its seller if a connection exists.
We reached out to both Microsoft and Machinima with follow-up questions. A Microsoft representative told Polygon that the company has no comment aside from the aforementioned statement; we're still waiting to hear back from Machinima, and will update this article with any information we receive.