It has handed the agency what is thought to be a £3m brief, following a competitive pitch, to manage its marketing across the region, both on a regional and market by market basis.
Tequila's first task is to develop a brand framework toolkit for Xbox's European subsidiaries. It will be responsible for finding partners and developing promotional programmes for game launches.
Microsoft has established partnerships with BT, NTL and Telewest, and is in talks about setting up gaming-only broadband packages. It is also negotiating with other companies, including Interbrew, about setting up partnerships to create promotions. It is in talks with a number of media companies, including MTV.
Tequila, which won the business on the back of its experience with youth brands, such as Adidas and the army, will additionally manage the Xbox Megacruiser, a touring unit that targets festivals and aims to create the ideal gaming environment.
Xbox is currently pushing its Xbox Live-compatible games, 40 of which will be available by the end of the year. The service has so far only managed to attract 50,000 European subscribers.
Last month Xbox repositioned itself as the ultimate social entertainment experience using the global tagline 'It's good to play together' (Marketing September 18).
Microsoft announced that it is spending £40m promoting the European relaunch in an attempt to usurp Sony's market leader, PlayStation 2.
Xbox European marketing director Michel Cassius said at the time that global ads by McCann-Erickson will showcase the console's games in a social context, contrasting with Bartle Bogle Hegarty's pan-European brand launch ads. BBH lost the account to McCann in April.
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