Reaction to the story has been mixed. Product placement is nothing new and some dismiss it as standard marketing practice, while others are raising questions about ethical concerns. Do or should YouTubers have to acknowledge when they are being paid to play or discuss a particular product?
For us, the news angle here is that Microsoft is recognizing the YouTubers as key influencers. The audience will need to make a determination about the level of transparency they expect from these folks and the YouTubers will have to decide their personal "rules." (Here's Joystiq's ethics policy, for the curious.)
Update: Microsoft and Machinima have issued a statement to Ars Technica: "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."