Christmas approaches, and video games once again find themselves competing with toys, gadgets, books and other items as they try to grab gifters’ attention.
But the industry has found additional ways to generate revenue with its most popular brands.
As with any other major form of entertainment, gaming lends itself perfectly to merchandising. If you know where to look, you can find soundtracks, novelisations, figurines and other toys, posters, T-shirts, trading card games and more – all based on some of the biggest names in games.
Examples are too many to list. The Halo Mega Bloks series. EA’s Need For Speed: Shift Scalextric. Hive Entertainment’s range of Final Fantasy XIII figurines.
Impact International’s Sack Boy products. Pokémon and World of Warcraft trading cards. The books, toys and more that Ubisoft is working on for Raving Rabbids.
There’s a plethora of products out there, but why have games firms invested so much in them? Are they just extra sources of revenue, mere margin makers or something more?
STRIKE UP THE BRAND
One of the key benefits is growing awareness of these franchises. While the likes of Call of Duty and World of Warcraft have brought the industry closer to being recognised as a mainstream entertainment medium, we still have some way to go and these products not only appeal to established fans but catch the eye of potential ones as well.
Square Enix is one of the leading players in this field, with a dedicated merchandise division producing items based on both its own brands and those of other publishers.
“Our merchandise helps to support the development of our brands both inside and outside of the games industry,” says the firm’s head of European merchandise Akihiro Ichimura.
“By showcasing the quality of our products at events such as the New York toy fair, Japan Expo and toy and cartoon exhibitions, we have managed to attract a lot of attention, earning ourselves a high reputation for what we are able to create.
“There has been a lot of demand from other publishers to create merchandise, such as Konami, SEGA, Capcom, Microsoft, Ubisoft, and several Japanese comic firms.”
It’s not just publishers creating these items, either. Accessories vendors and even fashion labels have invested in gaming paraphernalia.
Working with the larger games publishers, these products can be timed for release to support traditional promotions or keep the brand alive while consumers wait
for the next iteration of their favourite game.
“Merchandise is a great promotional tool for publishers,” says Dimitri van Eetvelde, managing director of gaming apparel firm Level Up Wear.
“It extends their brand’s visibility at no extra cost and in the end allows them to have more retail shelf space for the same brand. More specifically, clothing is a very powerful marketing tool as it is being worn by gamers in public, which raises awareness for the brand in an unprecedented way.”
Martin Richards, MD at Sackboy toy creators Impact International, adds: “The toy market is losing out to games, so we’re bolstering the sales with toys on the back of games.”
SHELF SPACE INVADERS
The added retail presence is another key factor. Often just as eye-catching as video game box art, these products spread a franchise across the store, from the games section to the impulse buys at the checkout.
Naturally, both publishers and retailers are more than happy with this arrangement.
“Whilst we can’t speak on behalf of the license holders, they do seem very pleased that we’re getting into other areas of retail,” says Sorrel Dryden, marketing manager at GB Eye, which makes posters featuring games such as Call of Duty and Halo.
HMV’s head of games Tim Ellis adds: “Merchandise is really about tapping into popular culture in a much broader sense, to give more choice to your customers who wish to ‘buy into’ the whole brand. They’re not only buying the game, film or music, but also the book, the poster, the t-shirt, and so on.
“Such items lend themselves to specialists such as HMV as well as indies, and helps to keep that bit of distance with the supermarkets.”
And this is not a novelty due to wear off any time soon. Many firms with a hand in merchandise report that demand is increasing.
“We have had great success from game retailers that promote impulse purchases of strong licensed lines,” says Impact MD Martin Richards.
“Online sales are stomping ahead, and this shows a real opportunity to grow our business.”
Ichimura adds that Square Enix has seen rapid growth in its merchandise division, particularly since it began distributing in Europe last year.
Meanwhile, GB Eye is expecting strong ongoing sales for its Black Ops and Assassin’s Creed posters given the continuing performance of previous products.
But the greatest benefit from the rise of games merchandising is the effect that such products have on gaming’s mainstream status.
Having a line of toys, t-shirts, and posters validates a game as a major entertainment brand in the mind of consumers, bringing the likes of COD, Rabbids or Kinectimals even closer to being a household name.
“It’s all a part of the mix,” says Ichimura. “Merchandising extends the brand to both established and new audiences which all helps to make the brand more recognisable.”
Ellis adds: “At HMV, we’re already able to cross-merchandise effectively between music, films and games, particularly when it comes to major franchises that cut across all these formats. It’s been a great opening for games, which have gradually moved into the mainstream where the bulk of consumer purchases and gifting lie.”
Of course, some argue that gaming has long since earned the right to produce such products, to have such presence on the High Street, given how key titles can outperform the likes of film and music.
“Over the last 25 years, we have largely dealt in music, film, TV and entertainment, but gaming has been growing as a successful poster product in the last two years,” says GB Eye’s Sorrel Dryden. “Gaming posters have a great sell-through rate, and are just as important as music, film and football posters.”
Level Up’s van Eetvelde agrees: “The success of such products for films and music was the original impulse for us to start a gaming apparel brand. We knew that gaming was on rise and today I think that gaming is well underway to become as mainstream as films or music.
“The success of merchandise is just another reminder that this is happening, and it is happening fast. From our daily contact with gamers, we know that gamers are looking for merchandise, but they are smart and want quality merchandise that properly represents their passion for the game.”