Video Game merchandise is adapting to worldwide changes and increased living standards in specific countries. The merchandise itself has helped to lift revenues of various games and has become an important companion with the most popular global games, now expanding into the indie game market as well.
Various game studios are now searching for new ways of adding additional value to their games, by offering convenient merchandise products with in-game characters, fully customized apparel, innovative toys, and collectibles as well.
The current global situation will have a further impact on the merchandise adjustments, and we might see more games offering digital types of merchandise in the future.
But, is now the right time to open up a Game Merchandise Shop?
Rovio's successful story of offering Video Game Merchandise for Angry Birds
Everyone probably knows the Angry Birds game, a casual puzzle game where you focus on the angry birds who try to save their eggs from green-colored pigs, their enemies.
But,
not everyone is aware that they mastered the merchandise, according to their 2018 profit reports, the merchandise itself resulted in 50% of their £255 million total profits.
As the whole business started with a game, which players loved for its low price, fun elements, and quick play sessions, it ended up as the whole empire around the game. Players accepted the in-game characters well, and Rovio took the opportunity and nailed it!
They expanded the reach of the game, market the game well, and seem like they created the right merchandise products their fans can’t resist buying.
The expansion of their products is now available as Toys (even LEGO now manufactures Angry Birds sets), Apparel & Accessories, Movies, Collectibles,…
Highest-grossing Video Game Franchises
The best selling video game franchise is from the game that went viral and has managed to gain the biggest exposure with their games, attracting an enormous amount of players in a short period of time, and managed to keep the game popular by running various events, adding new and regular content for players to play out, and working on the further sequence of the basic games.
The best-selling video game franchise is according to TitleMax still Pokemon, with an outstanding $90 billion in revenues. Pokemon is the biggest video game franchise and also the highest-grossing media franchise in general! Their games managed to make only a small portion of their profits, but the whole franchise made far more from merchandising.
Here are the TOP 5 Best-Selling Video Game Franchises of All Time
1. Pokemon - $90 billion
They may have earned most of their money from merchandising, but their games still rank seventh amongst the top-selling video games of all time.
2. Mario - $30.25 billion
Who doesn’t know Mario, the plumber from Italy? Mario is one of the most recognizable video game characters in history, who made Nintendo roughly $16 billion just with the Super Mario series.
3. Call of Duty – $17 billion
Title Black Ops 4 alone brought them $1billion in sales.
4. Wii – 14.8 billion
We know Wii as a console, but they also have their own branch of video games, series like Wii Play, Fit, Sports,…
5. Pac-Man - $14.1 billion
The legendary arcade game that kicked in the 1980s and is still kicking, with throwback titles and new puzzle games.
Source: TitleMax; TOP 50 Highest Grossing Video Game Franchises
The Gaming Industry is kicking up a gear, and according to MarketWatch VideoGames are now a bigger industry than Movies and North American sports combined, thanks to the pandemic!
And the whole gaming industry doesn’t seem to hit the top just yet, with the new consoles coming out.
With the expanded value in the Gaming Industry, it is expected that a lot of new highly popular Titles will come out by the end of the year, and the whole Merchandise industry and franchising will boost the revenues further. It’s a big market, but hard to get on that main road, especially if the game is not widely popular. Virality and popularity make it all easier to run a successful Gaming Merchandise.
So, what is driving increased yearly sales in the Gaming Industry?
If we do not mention the global situation with the pandemic, the release of new consoles will surely add up in the yearly revenues after Playstation’s and Xbox’s release, and some others like Steam Deck coming up as well. One of the biggest gainers is expected to come from China, with mobile gaming increasing its role and revenues.
Why mobile game revenues are expanding that fast?
Mobile phones are now the primary online connection for billions of people worldwide, where games are always on players’ reach – within their pockets. China also lifted a ban on gaming consoles, which also contributed to the dominance of mobile games in the biggest Gaming Market in the world!
Booming Video Game Industry compared to Film and Music Industry in Merchandise Sales
The Film, Music, Gaming,… which one of those is the top-grossing market?
Gaming is still the most expansive category in the world of entertainment, as people turn to games to socialize, play with their friends. Gaming is not just a child’s play but is increasing in every age segment. The children are playing it for pure fun, the elders want to relieve some stress after a long day at work, looking to relax, the others want to find friends and play the games they like together.
Social distancing and the lockdown made the whole gaming world even more approachable and attractive to those that haven’t been in the industry before.
So, it is not a coincidence that the whole gaming industry is roughly surpassing the Film industry (box office) by 4 times, and almost 3 times the music industry!
And the trend of increased worth in gaming is still not stopping there.
Merchandise sales in Film, Music, and Gaming Industry – is Merchandise equally appealing in the compared industries?
Global revenue of selected entertainment industry sectors in 2019
Sources: Newzoo, Comscore, IFPI
Film
In most instances, as much as 40 percent of movie merchandise is sold before the film is released. The absolute champion of merchandising in the Film Industry is the Star Wars franchise, which has generated roughly $12 billion in sales.
7 Movies that Made more Money on Merchandising than at the Box Office
Cars
You might be shocked that the film Cars isn’t a big moneymaker in theaters. The first two films didn’t reach a billion dollars combined, something that lots of solo films do regularly. But, Pixar made the whole success around the licensing – only the first Film made them over $10billion in global merchandise sales!
Harry Potter
$7.7 billion in global box office sales, which is nothing compared to merchandise sales of books, toys, scarves, … worth over $20 billion.
Frozen
$1.27 billion in global box office sales, but Disney made the real money with merchandising. They sold $5billion in merchandise, so we can conclude that the main characters of the movie Elsa, Anna, and Olaf, were quite popular with kids.
Minions
When Minions have taken over the world… Minions has made $2.5billions in retail sales, lots more than their Despicable me 2, movie.
Transformers
The bulk of that cash made from Transformers wasn’t from the movie tickets. All three movies combined brought them $2.6 billion, but the franchise came with $7 billion in merch sales!
Teenage Mutant Ninja Turtles
Even though the movie made ‘just’ half a billion dollars, the real money came from franchise here as well.
Toy Story
Toy Story 3 made $1 billion in global box office sales, but over $10 billion in retail sales. It is just easy to conclude that people adore bellowing movie characters. It is not a question now if Disney will be making a fourth film after crazy retail sales.
Music
The music merchandise industry is now one of the fasters growing. It gained 40% in sales between 2017 and 2018. Its biggest player, UMG, reported a 75% increase in revenue from merchandising through the first half of 2019.
Gaming
*Film and Music numbers can not be compared to the Gaming franchise business, like mentioned above Pokemon set high bars for merchandising with its $90 billion made from franchising.
Merchandise for Indie Games
Most Indie Game Developers are primarily focusing on the game itself, and less on other activities around the game.
The lack of available funds and time to invest in Gaming Merchandise is still the reason lots of Indie Games don’t decide to offer Merchandise. But, lately with the expansion of Kickstarter, Gaming Fairs, etc.. more indie developers wish to offer their fans at least a proper T-shirt with the main character of their game, game cover, or other unique stuff they come up with.
3 Top Sentences Indie Developers think when deciding about their merch:
1. Merch doesn’t make you money unless you’re super successful
2. Merch is a great Marketing tool (fairs, Kickstarter rewards,…)
3. You prepare Merch for the Fans, and not because of money
One of the main concerns for indies is a lack of funds, and without their games making a return on development costs and generating additional profits, they usually don’t decide to offer merch, as usually don’t have enough time to prepare appealing products, and handle the whole shipping process after developing the game for the full day.
Merch items used to be reserved for the largest franchises in the gaming industry, but there is not like that anymore. Things have changed, and now also smaller games have all chances to work on the branding and merchandise materials around their indie games. Lately, smaller games are seeing collectibles and comical physical versions of in-game characters or other graphics interesting to offer to their fans.
Concerns and expectations on Merchandising for Indie Game Developers
-> What if the game was developed independently from a very small team or studio who put tons of effort into the game.
-> What to expect from merchandising if you are an indie game developer?
Expanding Game Sales with the help of Merchandise is not self-evident for indie games.
Gaming Merchandise Store can cost you tons of money, not to mention the time invested to set all things up. So, before deciding to offer Merch for your game you’ll need to ask yourself a few questions?
-Do I have a decent and engaged player base?
Have you managed to build a decent following for your game on Discord, social media? Have you managed to build a warm community of fans and supporters of your work? Do they engage with your posts and news, or are they just silently following? How many of those fans do you believe would eagerly order a Merch product?
- Is my game popular enough?
Are you currently in an uptrend of gaining players or in a downtrend? Do you plan to further work on various promotions and other marketing activities that will result in expanded interest in your game?
- Can I afford to invest a lot of extra time or money?
It takes time to build a Merch Store Page, especially if you have zero experience in it. Also, take into account that the product generation takes time to prepare an appealing product at the end.
Indie studios are usually overly-busy working on their games, and they usually have limited amount of time to dedicate to other activities, such as merch. But, in case you have answered all of the questions above with YES, and you have a team member ready to put some work into preparing a Merch store, you should totally set up your merch shop.
Again, treat the merchandise of your game as another game dev project, it should be profitable at the end, and it should provide additional value to branding your game and offering your fans something unique.
Game Merchandise as a Bond between the Gaming World and the Real World
By offering merchandise to fans of your game, you tear down bridges between the Online Gaming World and the Real World, especially at times when you bring a character from the game to someone’s home.
Gaming Merch is a great Marketing tool that improves the branding and attractivity of the main product. Especially, if you plan to showcase your game on Fairs or launching a funding campaign on Kickstarter or any other similar platform.
Gaming Merchandise stores are visited by hardcore fans of your games, so before started implementing your Merch Store pages, make sure your community is engaged and eagerly waiting for big news from a developer or publisher.
Some of the biggest players in the gaming, movie, and music industry are making significant changes for their primary product with merchandising. But, not everyone has such huge chances.
Game Merchandise in proper moments can add additional value to your game
When working on your Merch make sure you are not fully dependent on the merch sales. If you think the game itself won’t cover the basic development costs, there are pretty small chances your merchandise strategy would be a success in the end. On the other hand, we’ve mentioned some interesting examples when a Film Cars made ‘only’ $1billion with two movies combined – which is quite a regular practice to reach with a decent solo movie. They invested a lot in marketing, branding, merchandising, and franchising the product. The atmosphere they build around the movie helped them reach x10 profits with after-sales/ merch and they declared a Movie/ business a success!
The same was with Pokemon, where they generated $90 billion in total from merchandising, which is a historical record, and that would be hard to overcome in the future.
But, as the gaming industry is booming, the whole merchandising business will grow in line with it. As Gaming Merch is now more opened to all sizes of games than ever before, we can expect some drastic changes in the Game Merchandise industry in the following years.
Merchandise can not guarantee your product success but can add up additional value to your game, and in some cases, it can add up…a lot!
