How retail made Skylanders

In his first interview as Activision’s UK MD, Roy Stackhouse speaks to MCV about the success of Skylanders, the launch of Swap Force and why the franchise will live on for years to come…

Skylanders: Swap Force arrived last week (Friday, October 18th) – how does this compare to your previous Skylanders launches?

Without doubt this will be our strongest Skylanders launch ever. The support we have had from our retail partners this year has excelled.

What you will see at launch is we have some really stunning in-store activity taking place. We have got everything we would have liked from an in-store perspective, we have very impactful in-store displays, thousands of interactive areas so that children can touch and feel the products before they buy it. We have the largest distribution footprint we have ever had for the game.

We are branching outside of what we would call traditional video games outlets, into toy specialists outlets, too. We are really excited. The support we have had from retailers for the launch has definitely been the best we have had since we launched the category.

What new stores are on-board?

As we’ve progressed through the year we’ve created over 1,000-plus incremental points of distribution. Amongst many others, these include The Entertainer, Toymaster, Fenwicks, WHSmith, Bentalls and Harrods. It is becoming a much broader church now, and I think that is testament to the size of the category we have created with Skylanders, it is now much more than a video game.

"Pretty much from launch on Skylanders, a lot
of retailers had to believe in this product in the
way we had to believe in it. We know we had to
get retail on-board to sell it for us, and for them
to do it they had to believe in it. And there were
some that believed in it more than others at the
start. But certainly everyone is on board now.
The support we get for Skylanders is absolutely
phenomenal from UK retail. I would just like to
thank them because without them it wouldn’t be
the success it is today."

Roy Stackhouse – UK MD, Activision

Does retail really play that crucial a role for Skylanders?

Pretty much from launch on Skylanders, a lot of retailers had to believe in this product in the way we had to believe in it. We know we had to get retail on-board to sell it for us, and for them to do it they had to believe in it. And there were some that believed in it more than others at the start. But certainly everyone is on board now.

The support we get for Skylanders is absolutely phenomenal from UK retail. I would just like to thank them because without them it wouldn’t be the success it is today. What you will find at reatil today is that you will have to go a pretty long way to avoid Skylanders. When you make statements like that you know you are onto a winner.

Skylanders takes up a lot of retail space. This year there are two new consoles and competitors like Disney Infinity. How do you make sure you maintain that shelf space?

If you produce a product that people want and people are happy to go and look for, then you will always command the space in retail. We are confident that with Skylanders we have a product that does that.

Also it is an interactive product, so you have the ability to allow consumers to go up, to touch and to feel, you can see the product inside the packaging, you can put it on an interactive unit. It brings video games to life in a way in which that a lot of other video games can’t. Because of that, and the belief our retail partners have in the product, it means we have managed to command the space we have got and indeed grow that space in many instances for launch of Swap Force.

Some of these toy retailers, including Toys R Us are not tracked by Chart-Track. Does that mean we are not seeing the full picture when it comes to Skylanders’ success in the UK?

Your observation is correct. A lot of the success of the brand comes from what are deemed ‘peripheral products’, which I think is an unfair description because they are the characters that make the game what it is.

We have something like 130 licence agreements with Skylanders. If you start to throw all that in the melting pot, the size and the scale of the brand is difficult to measure. We can’t see the success of the brand in the old way in which video games are measured. The absolute success of it is probably softened by the fact it is difficult to get all the numbers in one place.

How long can Skylanders go on for?

As long as the innovation continues to be as great as it is, then I don’t see it having a limited shelf life. The reason I say that is because if you think about the possibilities in this category, what has been achieved with Swap Force and its innovation, and the endless possibilities in terms of the Skylanders universe. This must be a creative goldmine to work on because a child’s imagination is one of the most fertile in the world, and if you can tap into that then there is endless opportunity for innovation.

In a recent financial call, some analysts wondered if Skylanders could become the next Guitar Hero. Go from boom to bust. What do you make of that?

It is certainly not another Guitar Hero. The two franchises are completely different target markets and market position. Let’s not lose focus, Guitar Hero was a phenomenal success, absolutely huge, like Skylanders is now. But I struggle to see the comparison.

"It is certainly not another Guitar Hero. The
two franchises are completely different target
markets and market position. Let’s not lose
focus, Guitar Hero was a phenomenal success,
absolutely huge, like Skylanders is now. But I
struggle to see the comparison."

Roy Stackhouse – UK MD, Activision

Has the poor performance of Nintendo’s platforms impacted your expectations for Skylanders?

Not at all. We still expect to sell a lot of Skylanders on the Nintendo platforms. Just because the sales may have softened doesn’t mean there isn’t a lot of consoles out there that children are still playing on. We still see Nintendo as a very integral part of our sales mix going forward.

Do you feel the pressure from Disney Infinity?

You need to go back to the basic principles that this is a category that we created. It’s one we are clearly close to and continue to innovate in and push forward. If you look at similar industries when a new category is created, one of the testaments to that category is when competitors move into it, because they see the size, scale and opportunity of it. That is what you are seeing with Skylanders. You are seeing people who view this as a category that will be around for a really long time. We are very confident we will continue to dominant in that arena because we have a franchise that has been around for some time now. We are confident we will have another great year.

Why do you think Activision has managed to make a successful kids game when other publishers, THQ for example, have failed?

I can’t talk for other publishers. But we see the kids marketplace as a huge opportunity, but it’s also a really demanding sector to do business in. I keep mentioning it, because it is absolutely crucial in this area, but you have to innovate.

If you continue to give kids something new and exciting that they can share with friends, then you are onto a winner. But a lot of hard work has to go into that. You have to have the talent in the business to do that. We have that in Activision. We have the winning formulae here and we will continue to work hard.