There's a huge amount of growth to come from the interactive sector.
“Thankfully, business is well up on 2009, which was the worst year of most people’s careers. We are delighted to have survived the tough trading conditions by working very hard and thinking fast, to seize opportunities that did exist. The interactive sector has a huge amount of growth to come.
However, while the sector enjoys strong long-term underlying growth, as more new platforms emerge and more people start playing interactive games, it has not been immune to the recession. The console games sector in particular (PlayStation, Nintendo and Xbox platforms) has seen faltering sales totals for boxed games at retail. However, they are buoyed by the key trend for games to become available by direct digital download and also by hardware technology innovation.
This chiefly comes in the form of the new motion sensor controllers for PlayStation and Xbox, which lend themselves to new game types and new licences.
The real excitement in the market at the moment centres around app stores, especially Apple’s for the iPhone and iPad devices. The business model of good revenue returns and reasonable development costs has seen thousands of apps being launched.
The challenge they all face is how to get noticed in the crowd by consumers, which happily for us, leads many developers and publishers to look for famous brand licences. There is also lots of activity in social media games – like Facebook’s Farmville and Pet Society – which have made impressively large revenues from selling ‘virtual goods’ through micro transactions.
Everyone knows that digital media is going to become more and more important, whichever industry they are in, retailer or not. Many companies struggle to get to grips with the transition from their traditional business models and methods. Happily, that leads to some of them asking us to lend them our expertise and find them specialist partners/licensees. The best example related to the merchandise licensing industry is the fact that new IP is emerging from new media and not from movies or TV. For example, LittleBigPlanet, Simon’s Cat and Gummy Bear.
Retailers can no longer play safe by relying on broadcast media exposure and viewer data. Yet, it remains very, very difficult to persuade a retailer to order stock of say, Gummy Bear, instead of just doing Winnie the Pooh again for the umpteenth year.
I think the rest of 2010 is going to turn out well for the sector. The recession still has everyone by one ankle, but business confidence is returning as individuals and companies realise that they have not suffered like those in other sectors. There is always something new happening in the interactive sector and it is a growing market, not mature or in decline like many merchandise categories.
For us, we have Gummy Bear, Me To You, Mr Men and Little Miss and Chris Hart’s How To Draw.
I see growth in our sector coming from market penetration of casual gaming devices and high speed internet.”