When it comes to licensed products, movies and kids’ television shows still rule the roost, with Disney, Marvel and Star Wars toys lining the shelves and selling gangbusters all year round.
But while the icons of passive media rake in millions year on year, the video game industry has quietly crept up and overtaken film as the most profitable entertainment industry in the world.
As of 2015, the video games industry, worldwide was worth a staggering $118.6 billion. While certain brands like Minecraft and Nintendo have begun to push into the toy market in a big way, the vast majority of lucrative licenses still remain untapped. The market is showing such potential that Brand Licensing Europe has highlighted it as a main target area for their trade show this year.
“We’re really excited about gaming being a key focus of BLE this year,” explains Anna Knight, brand director at Brand Licensing Europe, “According to LIMA, the licensing gaming industry has grown 10 per cent in the last year alone and is now worth over $16.6bn globally so there is amazing potential for gaming brands.”
BLE will even introduce a brand new Gaming Activation Zone to show, aiming to attract more big names from the world of games.
“We’re also noticing growing interest from retailers who are asking us which gaming brands will be at the show,” adds Knight, “which is why we’ve decided to launch a whole host of gaming initiatives; we can’t say more for now but watch this space.”
While videogame franchises have not successfully crossed into the toy market, toys have begun to cross over to videogames in a huge way due to the Toys to Life genre. LEGO has always had a strong foothold in the games industry with its various licensed platformer games but lately the company has taken cues from Skylanders and Minecraft with LEGO Dimensions and LEGO Worlds. Dimensions sits firmly in the ‘Toys to Life’ category, while Worlds is a building game akin to Minecraft, which itself owes a great debt to LEGO with its building-based gameplay.
Conversely, licensed video game products remain relatively niche. Fledgling apparel firms like Insert Coin have begun to cater to this lucrative but untapped market.
One such firm that has placed its stakes in video game-based products is J!NX, with apparel and toy ranges based on such hit video games as Minecraft, The Witcher and Rocket League. We caught up with Sean Gailey, co-founder of J!NX to find out why gamers are hungry for merchandise.
“As a hardcore gamer myself, I am constantly looking for ways to celebrate my love of gaming,” explains Gailey, “Products relating to video games, like the ones we create here at J!NX, give fans a means to expressing their love of gaming with those around them.”
While you are sure to find J!NX’s popular Witcher 3 Geralt figure on the shelves of your local GAME, you are unlikely to find it on the shelves of your local Toymaster. However, one video game franchise that has now become a triple threat with movies, TV shows and merchandise is addictive mobile action game Angry Birds. SCS Direct have recently inked a deal with Rovio to produce toys based on the franchise who joins a raft of other licensees.
“Our company owner, was an avid Angry Birds player who was interested in the franchise,” explains Alison Centorino from SCS, “The widespread popularity of the Angry Birds game as well as the spring 2016 movie release increased the franchise’s brand recognition tremendously. As a result, Angry Birds has grown further through a wide variety of licensed products ranging from kitchen products to pool toys.”
“Licensing agencies can take advantage of the growth of video games by partnering with well-known licenses that have established brand recognition,” continued Centorino, “TV and movie franchises have gained more popularity than video game franchises since movies and TV shows appeal to a greater audience. In addition, TV shows and movies are advertised more frequently and, as a result, they reach a larger audience.”
Another franchise that has found massive success with this three-pronged attack of content is the Pokémon franchise.
“It was always The Pokémon Company’s intention that it should expand its origins, and the three pillars of gaming, trading cards and animation are central to the brand’s ongoing success,” explains Mathieu Galante, senior market development manager Europe at Pokémon, “Collecting and battling translate really well into toys and consumer products.”
Off the back of global phenomenon Pokémon Go and Sun & Moon, the franchise enjoyed one of its most successful years to date.
“According to figures recorded by the NPD Group Toys retail tracking service, the Pokémon property recorded a 285 per cent increase in sales throughout last year against market growth of six per cent in the whole UK toy market,” adds Galante, “In the past three months, Pokémon increased sales by 512 per cent versus the 7.7per cent market growth. Not only that but, in the Christmas week, the Pokémon Trading Card Game acheived a 737.6 per cent increase on the previous year.”
While competitors like Yo-Kai Watch have begun to emerge, no other video game property has reached the highs of this skyrocketing brand. Fledgling video game licensing firm Bits & Pixels believes that properties like Overwatch have the potential to give Pokémon a run for its money.
This new agency has recently signed a deal with gaming giant, Blizzard, the publisher behind such juggernauts as World of Warcraft and Overwatch. With the goal of bringing video game products to the mainstream, the firm is eager to tap into the power of toy giants.
“There’s more a focus on getting a master toy licencee on-board,” explains Sandra Arcan of Bits & Pixels, when quizzed on trends within video game licensing.
“There’s been ones for Halo and a great many franchises. There’s going to be more brands going for a Master Toy license, like getting a Mattel or a Hasbro to do a full toy range, rather than just getting Hot Toys or collectable high-end statues or figurines. They’re going for the Mattels and Hasbros of this world, some of these big toy companies that don’t typically go for games brands. I see there being more traditional toy ranges out there.”
Sandra continued to expand on the growing popularity of video game licenses, saying: “It’s only right that games licensing has exploded because it’s the biggest industry in entertainment. It makes more money than film and music. These brands are so beautiful; they should be represented with merchandise.”
But what would it take to get retailers to embrace video games? On January 10th ToyNews reported that Jazwares would be turning free-to-play online game Roblox into a toy line and saw traffic spike significantly. The intensely dedicated fanbases for games like Roblox and Minecraft are champing at the bit for any toys, making it the perfect cross-over product, especially given the young age range of the game’s audience. Su-Yina Farmer of Bits & Pixels explains that with many games being digital and free to play, fans crave a physical representation of their passion.
“Having collectables, if they really love a game, it’s a cool way for them to say they really like it,” adds Farmer. “Even if they don’t want the plastic box. If you like a game, you want to have something physical too.”
With so many lucrative properties going untapped, it seems a no-brainer for licensing firms to get their stakes in with game licenses while they can. For retailers, it’s time to start paying attention to this blooming art form. Bringing the biggest names in gaming from the specialist shops to mainstream stores is a challenge that may hold great reward for those daring enough to attempt it. Game on.