The new heroes of licensing?

This recession has so far only led to a necessary purge of badly run and old fashioned companies and the interactive entertainment industry will emerge very strong, despite the credit crunch.
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If they are honest, merchandise licensors will say that, as much as they relied upon listings at Woolworths, the buyers there made life difficult. They underminded the value of brands with low quality products and low prices, and with in-store displays inspired more by jumble sales than modern retailing.

For video games companies, yes, Woolworths was a distribution channel and EUK was even more important. But for ages now, the online retailers like Amazon and Play.com have proved more straightforward to deal with - and they have been building their market shares.

BBC News has kept up a relentless barrage of negative credit crunch stories for months. They have needlessly worsened the fear among consumers and the trading conditions for businesses.

Yet, they reported this last month:

"Video games are poised to eclipse all other forms of entertainment, according to Activision boss Mike Griffith, during a keynote speech at the Consumer Electronics Show in Las Vegas. He said video games were prospering, as interest in almost every other category of entertainment declines.

"He quoted US market statistics which showed that between 2003 and 2007 sales of movie tickets fell by six per cent; the number of hours of TV watched dropped by six per cent; sales of recorded music slumped 12 per cent and purchases of DVDs remained flat. Over the same four-year period, said Mr Griffin, the video game industry grew by 40 per cent."

It has been possible for several years to track the stagnation and decline in traditional children's television and retail merchandise.

Yet, the vast majority of people in the licensing industry stuck with that world they understand and developed little knowledge of the fastest growing sector. Now they are desperate to replace lost income from traditional sectors, but without expert support they will waste time and make mistakes, because they do now know the interactive games market.

The variety of games platforms continues to expand: TV consoles, handheld consoles, mobile phones, internet, gambling, interactive television...

The audience for interactive games gets broader and broader. The former preservce of male gaming geeks is now an entertainment media enjoyed by grannies playing Nintendo Wii games with their granddaughters.

Rights owners and games publishers making wise deals in the interactive games sector continue to cut their costs and boost their revenues through licensing.

Brand owners must look at a more integrated interactive strategy across multiple platforms now. They have the opportunity to ready their companies to emerge very strongly from this recession, into an exciting and dynamic new business world.

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