So who has the best game merchandising
program? In taking on the task of helping my friends at Fans.lu, I had to do some research into how game
companies merchandise their intellectual property. I was both surprised and a bit dismayed at
what I discovered. First, lets talk about Rovio and their Angry Birds success.
Angry Birds was a massive winner as a game
and even more so as a brand. What is truly mind boggling is how they've managed
their IP and created over $200M in sales with their branded t-shirts, plushies
and other imprinted merchandise. You would think this would be slowing down but
with the launch of their Star Wars Angry Birds, it’s only growing. It’s
expected that in 2012, Rovio achieved a whopping $500M in sales of which 40%
will be attributed to merchandise (http://www.mobileworldlive.com/rovio-plans-to-increase-merchandise-revenue).
And you’re thinking, ‘yay for Rovio’ right? The ugly fact is that only about 2%
of the games out there actually provide merchandise for their games and that 2%
is really only the biggest players. The rest of the developers who have equal
to (or even better) IP, artwork and concepts don’t take advantage of the power
of their hard won brand. So the real
question is who else is creating incremental revenue via their IP, how are they
doing it and more importantly, how can you do it?
The
List (for context)
- Rovio's Angry Birds: Everywhere! and here http://www.angrybirdstees.com/
- Valve: Hits like Portal and Team Fortress http://store.valvesoftware.com/
- EA: From Plants vs Zombies to Medal of Honor: http://gear.ea.com/apparel/t-shirts.html
- Ubisoft: Assassins Creed: http://store.ubiworkshop.com/
- Rockstar Games with massive hits like GTA and Max Payne: http://www.rockstarwarehouse.com/
All of the above publishers have great
games, no arguments. What they’ve also done right is create some pretty amazing
t-shirts, hats, action figurines and posters.
They’re also making them available in very simple online stores that
take advantage of their social network power.
How
to do it
To achieve even a small measure of success
in creating a line of game merchandise you first need to answer a few
questions:
- Do your players want merchandise? You need to understand your players and nobody knows them better than you. If you have a solid following on Facebook, if you have dedicated fans who wait for your game releases and if you have great IP, chances are there is already a demand for your merchandise. If you’ve been to E3 or GDC and see how many t-shirts are consumed at those shows, you’ll understand what I mean.
- What are your options for getting it set up? You can create your own merchandise by designing everything from scratch and setting up your own store using Volutions or BigCartel. This gives you 100% control and great profit margins but the real challenge is you need to get your t-shirts printed and you need to manage the shipping and customer support. This requires some serious capital outlay and is a massive pain in the butt if you’re only selling a couple hundred shirts a month. You could use the ubiquitous Cafepress which will print and ship everything for you but the quality & cost makes this a very un-scalable solution. Still, not a bad choice if you are only going to sell 10 shirts a month. And then there is the Fans.lu service: they set up the store, create and imprint the product, do this shipping and handle customer support. They also don’t require a set-up fee and take their profit from the sales (low risk). If you’re looking to sell between 100 and 1,000 shirts, posters ect a month, this is your best bet.
- And finally, how are you going to promote it? Building a store and getting some swanky shirts made up is only half of the solution. Once you’ve decided what you’re going to merchandise, you need to promote the hell out of it. Facebook, twitter and of course, your own website. Not only will this create incremental revenue for you, but it will also expand your brand beyond the game.
However you approach it, take advantage of
your brand power and create incremental revenue through merchandise. Even if in
the end it only generates only 5% extra revenue (and not Rovio’s 40%), you’re
still going to come out ahead.
Full Disclosure: Chris Hennebery is a
consultant working with Fans.lu
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