From pixels to products: How video gaming has become a stronghold in licensing

Licensing.biz chats to the man that was there from the beginning, LIMA UK's Kelvyn Gardner about the evolution of video games in licensing.
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While it may be snapping up all of the headlines of late thanks to the likes of the wildly popular Fortnite or Activision’s Overwatch, video game licensing is no new phenomenon.

For those of you that were there from the heavily pixelated era of the late 80s and early 90s (man) you’d know only too well that there stood a decade from which a new sub-sector of character and entertainment licensing emerged.

Who would have thought that, when he came strolling onto the scene in 1985 to hop onto the heads of literal 8-bit armies of turtles and mushrooms, Super Mario would also kick a new phase of licensing into gear?

Mario and pals have now gone on to become the stars of a robust licensing programme from Nintendo

Mario and pals have now gone on to become the stars of a robust licensing programme from Nintendo

Apart from being the protagonist of Nintendo’s best-selling Entertainment System video game title, Super Mario Bros, which sold nearly 40.25 million units in its heyday, the heroic plumber became the poster boy for video game franchising.

The Super Mario series is of course, just a part of this global brand that includes a plethora of other video game titles, a TV series, printed media, truckloads of merchandise and one film that for most, including its actors, is best left forgotten.

Managing director of LIMA UK, Kelvyn Gardner was there for the sector’s first real emergence into the brand licensing space, running, as he was, Merlin Publishing at the time, the team behind the popular Nintendo Sticker Album.

“In the 80s and 90s here in the UK, Super Mario was a big success in licensing,” he recounts. “It had about 30 licensees back then, which included the Nintendo Sticker Album. In 1992, we sold more than 12 million packets of Nintendo stickers across the UK.”

While the numbers were big, the licensing around video game properties was still fresh and a vastly less refined when compared to the hugely lucrative deals surrounding sponsorship and streaming talks in today’s esports space. In fact, Gardner remembers peddling Nintendo merch at events such as Games Master Live at a time in which the character’s biggest rival took the form of the power-charged SEGA mascot, Sonic the Hedgehog.

‘So in a way, video game licensing is far from new,” continues Gardner. “But I think what we have seen in the last five years is a maturing of the sector to a point where most people in the industry, sort of, get it. There has been a tendency to write it off as a nerdish pursuit that you couldn’t really measure an audience for, both of these things have changed now.”

Activision Blizzard's Overwatch boasts phenomenal game sales, its own esports league and a growing portfolio of consumer products

Activision Blizzard's Overwatch boasts phenomenal game sales, its own esports league and a growing portfolio of consumer products

The advent of streaming has certainly changed this or the integration of capabilities such as Twitch into gaming consoles, digital game downloads and more means that video gaming audiences most certainly can now be measured, as well as the level of fan-engagement it encourages.

And if the video gaming community is known for anything, it’s its level of investment in the hobby. You only need to look at Twitter to have this confirmed. But beyond the inane ramblings of social media-crazed gamers, the level at which single players invest and engage with the media is beyond anything else of this time.

“The fact is when you have a player playing Call of Duty for example, they are doing nothing else other than playing Call of Duty,” says Gardner. “Kids watching TV have probably got Facebook going on, Instagram, on the phone to someone, whatever it is, they are multi-screening. The claim with video gaming is that their attention is more wholly focused on the IP being presented.”

It could be the reason why Call of Duty licensed socks have been one of the best-sellers around in recent years. Is it the most obvious category for the IP?

“Not really,” says Gardner,” but there is no reason why those type of things, if you create a distinctive enough brand ID, can’t work in a larger realm of licensed merchandise. And it is clearly going to get bigger.”

Especially, predicts Gardner, as greater emphasis is placed upon PC gaming, which he suggests will continue to open gaming to wider consumer audiences outside of console gaming. Among them is the relatively newly forged audience for esports, an as yet unchartered domain of vast licensing potential – if only the industry could figure out what to do with it.

“Esports is one area that most of us have yet to get a firm grip on. We see certainly see it growing and understand the potential there,” says Gardner.

In this regard, our cousins across the Atlantic are surging ahead, Already, Activision Blizzard has been extremely proactive in carving out esports’ place within the licensing industry having created esport around its various titles, Call of Duty and Overwatch among them.

Not only this, Activision Consumer Products’ Tim Kilpin has taken huge strides in building the licensing programme around the company’s strength in esports, bringing in the likes of Hasbro and Uniqlo to offer Overwatch branded Nerf blasters and clothing, respectively (of course).

It makes sense; typically the US is fuelled with an unwavering enthusiasm that so often does carve out new paths of economic pursuit. It’s highlighted in the very growth of the esports concept itself.

Esports attracts the crowds in custom arenas, big broadcast and sponsorship deals and the licensing opportunities around continues to be explored.

Esports attracts the crowds in custom arenas, big broadcast and sponsorship deals and the licensing opportunities around continues to be explored.

“The esports structure works backwards to conventional sport,” continues LIMA UK’s Gardner. “Conventional sport started with all of the money coming from ticket sales, then a little bit from Sponsorship, then broadcast and merchandising after that.

“Esports, conversely, gone from broadcast, then sponsorship, a little bit of merchandise then ticket sales at the lowest end. Much of the merchandising has been through touring or team merch, even individual players are building brands around their names.”

It’s true that at present, there doesn’t appear to be much structure in place around esports licensing, but with the likes of Beanstalk and Tinderbox now in the driving seat with brands like ESL (Electronic Sports League), all this is poised to change.

The licensing firm is well-versed in the field of video game licensing working with the likes of Xbox, Halo, Rare, Crash Bandicoot, Call of Duty and more all under its Tinderbox umbrella. Meanwhile, IMG has picked up Fortnite. It all means there’s plenty more on the horizon from the world of video gaming.

“Over the next five years, it’s going to grow. It’s going to have an element of convergence,’ says Gardner. “We have video games based on films, films based on video games. Nobody has quite that right yet, but it will get there.

“The understanding around video game licensing isn’t quite there yet, but it is beginning to mature and be accepted. Call of Duty is an excellent example of this gradual maturity.

Call of Duty

With no standalone character or icon, Call of Duty exemplifies the evolution of video game licensing and complete fan engagement

“On the surface it’s just about people fighting. It’s just images of soldiers. How is that licensable? But the brand itself has captured the imagination.

“Mario and Sonic share something that they look like cartoons, but AAA games are in a different world. Forbidden Planet has a section of video game merch has this clever ‘in universe’ licensing.

“You’ll get something like Assassin’s Creed and the t-shirt would be Assassin’s Creed licensed, but instead of being blatant it would have the name of a temple that the protagonist is in in the game.

“It’s a bit of one-up manship by the fans that is driving a really creative outlet for video game, and pop culture, licensing at this level.”  

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