"Licensing is critical to the success of physical video game retail," says Gaming Heads

Recent years have seen a steady decline in the number of physical video game retail shelf space owing to the surge in alternative platforms for purchase such as online and digital downloads.
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At what has been called an “evolve or die situation” for physical video gaming, licensing has been highlighted as ‘critical to the success of retailers.’

The team at Gaming Heads, a firm specialising in pop culture and video game merchandise and consumer products has told Licensing.biz that as video game brands are “finally getting the respect they deserve in the consumer product space,” licensing provides the solution to struggling brick and mortar retailers.

Recent years have seen a steady decline in the number of physical video game retail shelf space owing to the surge in alternative platforms for purchase such as online and digital downloads.

Dan Thurgood, head of wholesale at Gaming Heads has suggested that by looking closer at video game merchandise - an area that is reportedly on the increase - retailers have a chance to regain margins.

“Honestly, it’s an evolve or die situation for physical gaming,” he told Licensing.biz. “Consumer products are a great way to shore up diminishing demand for physical games and critical to the success of retailers.

“Typically toys and collectables have a healthy margin that exceeds new games and can match used games. The challenge is visually merchandising these products and simply having enough physical space to display them appealingly in store… it’s hard to replace the idea of a half-inch wide game box that retails at $60.”

Despite the struggles facing physical gaming retailers, consumer engagement with the entertainment media has never been stronger. Third quarter 2018 results from the NPD have revealed that US consumers spent $9.1 billion on video games, marking a 24 per cent uptick year on year.

This spans all content categories including full-game, DLC/MTC, subscription and mobile gaming. Mobile games and digital content for console and portable platforms saw the most growth.

Among some of the best-selling titles are Candy Crush Saga, Fortnite and Marvel’s Spider-Man, while accessories sales grew 44 per cent.

In the consumer products stakes, Gaming Heads is reporting sales inline with this growth having recently shifting more than one million units of its popular Fallout 76 Bobbleheads.

“Consumers certainly want more gaming based merchandise,” continues Thurgood. “But they are being more particular about the items they want to spend their money on. Typically movies and TV dominated the licensed product landscape. Now manufacturers are realising that a video game is just as much of a rich storytelling experience as a movie might be.

“Exclusive product, rare items and high end collectables with tons of details and features are becoming the most desirable among these audiences.”

Gaming Heads currently works with some of the biggest gaming properties - the likes of Fallout 76 and Tomb Raider among them - from some of the world’s biggest gaming publishers, including the likes of Bethesda, Sony and Square Enix to name a few.

In its efforts, the firm has launched a number of new products, diversifying its footfall into international territories at the same time.

“Earlier in 2018, Gaming Heads announced a series of six statues celebrating 20 years of Tomb Raider,” says Thurgood. “The series captures the evolution of Lara Croft over the years and is a remarkable example of the sophistication of gaming, character and story development.

“Meanwhile, Fallout is a rich world to design products around and the community supports a wide variety of product. Of note, in the past 12 months we have launched a Deathclaw Statue and a life-size T-45 Power Armor Bust.

“Mass Effect fans have been incredibly supportive of our products over the years, and this year we added a FemShep statue to our already extensive collection of Mass Effect characters.”

A toy and collectable consumer products evolve, so too do customer expectations. Today, firms like Gaming Heads are feeling the demand for “more detail and features” on their products.

“We have always excelled in pushing the envelope on product detail, unique licenses and exclusive products you can’t find anywhere else. There aren’t a lot of manufacturers doing the type of work we do, but we still have to stay constantly on point to satisfy the consumer,” Thurgood concludes.


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