Forget about the business of games for a moment and try to put yourself in the mind of a ten-year-old boy or girl.
To them, a game brand they admire such as Moshi Monsters, Pokémon or Sonic the Hedgehog is probably not seen as just a video game – nor a boxed copy sale – but an entire world they can get lost in and will want to explore further.
Merchandise lets consumers do just that – whether they are children with an interest in Ubisoft’s Raving Rabbids games or older gamers who want clothing based on more serious IPs such as Mass Effect.
Often unfairly described as ‘cashing in’, merchandising not only provides an additional source of revenue for a publisher or developer, but it also gives passionate fans an extension to a game or character they love.
“Merchandising is a really important move that enables kids to connect with the brand on a variety of levels,” says Darran Garnham, head of licensing for Mind Candy – which has developed the hit online virtual pets game Moshi Monsters. The firm sells plush toys, cards and more. It even opened a temporary pop-up shop earlier this year.
“When kids love a brand or a character they want to experience it on their terms,” he adds. “Whether that be playing the game online, taking a magazine in the car, swapping trading cards in the playground or hugging a cuddly toy in bed.
“Physical products help the characters come alive outside the game and broaden the affinity kids have with the brand on and offline.”
The same can be said for a vast spectrum of gaming IP – not just kids’ franchises. Square Enix’s licensing division has partnerships in place for it to produce merchandise based on other publishers’ properties such Halo:
Reach, Metal Gear Solid and Bayonetta figures.
“I am sure there is a strong demand for the children’s market, but I imagine that market is more susceptible to ‘trend’ successes,” adds Square Enix Europe’s merchandiser Akihiro Ichimura. “However, we concentrate on collectible merchandise which is renowned for high quality, so we have earned a great reputation from our fans.”
As the industry continues to evolve, publishers are seeing an increasing demand for game merchandise.
Worms developer Team 17 hired AT New Media to branch its brand out to licensees, retailers and promoters, and is working on a collection ofWorms products (see ‘Key 2011 merchandise’ over the page). Meanwhile, Sega brought in a new head of brand licensing for Europe earlier this year, Sissel Henno, to ensure Sonic’s 20th anniversary is met with sufficient merchandise.
“Licensees and retailers are starting to realise there is a shift in the consumption of entertainment. A lot more time is spent playing video games in place of watching TV for instance,” Henno tells MCV.
“If you ask kids today which brands they favour, many of them will list characters from video games and social media. I believe there is still vast untapped potential for licensing based on games, and we will see an increase in overall sales as more retailers start listing the stock and see the results in their sell-through numbers.”
Ubisoft is another publisher that has seen a shift in games’ ability to cross over into new markets. The creatures from its Raving Rabbids Wii party game franchise are available as plush toys and have even appeared Renault TV ads.
“The characters, storylines and visual styling of games have become more iconic and immersive over the years,” says Ubisoft’s UK commercial manager Chris Marcus.
“That’s translated into some games’ ability to successfully cross into other media, in the same way as a hit movie or TV series might.”
AT New Media’s business development director Simon Kay believes games are being taken more seriously now than before, opening the door for more merchandising opportunities.
“Games are ultimately bigger than Hollywood movies in many instances, but for some reason their value has always been seen as lower grade,” he says.
“Merchandising in this space has grown naturally with the acceptance of games as part of everyday life.”
This growth is something that clothing firm Level Up Wear has seen first hand. It says demand for its gaming T-shirts increased threefold from 2009 to 2010.
As new gaming platforms continue to grow, so too does new IP and the opportunity for merchandise. This is especially the case with casual online titles and downloadable App Store games such as Angry Birds.
With its novel pick-up-and-play nature and a price tag of just 59p, the game has exploded across the casual market, paving the way for a line of plush toys and phone cases.
The Pokémon Company also says the rise of digital has expanded the fanbase for the franchise – and its range of merchandise.
“Pokémon has always been about battling, training and trading, regardless of where you live or who you’re playing,” a spokesperson tells MCV. “New features like the Pokémon Global Link or the Pokémon Trading Card Game Online websites make these key components more accessible to Pokémon fans globally.
“This creates a global fanbase that, in turn, purchases Pokémon merchandise which can be geared toward any language or nationality.”
Others believe staying creative is key to quality game merchandise.
“Anything is possible so long as game makers continue to be creative and reach new heights of interactivity and relevance,” says Ubisoft’s Marcus. “For instance, our consumer products team will be launching a new high-end range of products for elite fans based on Assassin’s Creed, Child of Eden and Ghost Recon.”
Mind Candy feels it will see more fast moving consumer goods tie-ins and promotions in the future. Garnham believes a bridge between virtual and physical merchandise is part of the future of game merchandising.
“Retailers haven’t quite grasped the potential of gaming-based IP as yet but as our figures show, the appetite is there,” says Garnham.
“I think we’ll see a closing gap between virtual and real world goods. You’ll be able to get plush of your personalised monster, a poster of your avatar or a book based on your social network. It’s currently too expensive, but the technology is on the way.”