In the Quest for SWAG

The first company I started was a t-shirt business. Having a background in art helped a great deal because the biggest difference between good t-shirts and bad t-shirts was the artwork. My art-foo was good and theirs was bad, so I had an edge. I used my little t-shirt venture to grow another business that focused on event management. I played a lot of volleyball so I started my own league and pretty soon I had over 500 teams playing every week. I take a small bit of pride in the fact that I was able to leverage my t-shirt business to build my event management company through brand, swag and uber-cool prizes (I still see my Starbucks Volleyball shirt at the beach). To me, it seemed a very simple thing to leverage t-shirts to promote a brand.

 So I find it a bit frustrating that in the games business, 98% of companies are not taking advantage of this. So many great games and so few cool t-shirts. And yet when you go to E3 or GDC, there are hundreds of gamer-shirts. Yes, companies like Jinx and Play.com do some brisk business and the marketing companies helping the publishers also have no problem creating the swag. What I don't get is why these publishers and developers don't push more merchandise to create incremental revenue. You would think everybody would be all over pumping out plushies, bobble-heads and t-shirts after Rovio's success with Angry Birds. But very few are. You could imagine how happy I was to find out about Fans.lu. This company has created a turn-key solution that allows games developers/publishers to launch a store to sell merchandise based on their IP. Fans.lu build the store, creates the products, manage the inventory and fulfill to the fanboys/girls with the publishers only having to provide the game imagery needed to create the product.

 But why is this important? So many great games and yet the profit margins continue to shrink. Now look at Rovio's Angry Birds again. In 2011 their revenues were up 963% to $106M and of that 30% came from t-shirts, plushies ect*. That is over $30M from merchandise alone and Rovio is projecting 50% of their revenue will come from merch in 2013. Ok, so you're not a Rovio and your side-scroller isn't Angry Birds but even so, chances are you are leaving money on the table by not offering a t-shirt to your players. Even using the worst case scenario where 1/500 players will buy a shirt or poster from you, you could be talking about a boost in revenues of 3-5%. And if you do have a great fan-base then its more likely to be 1/25 that are interested. That could be a lot of incremental revenue that might mean the difference between your little game being solvent and you having to sell a kidney to make payroll.


Full Disclosure: I'm helping out at Fans.lu which is in the business of helping game developers create merchandise for their IP. Let me know if you'd like more info.

~chris hennebery


*Kathleen De Vere, May 7th, 2012 http://www.insidemobileapps.com/2012/05/07/rovios-revenues-jump-963-year-on-year-to-106-3m-in-2011/