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Gaming brands offer licensees longevity, says GfK

Bestselling console games now often rival takings at the box office for blockbuster movies.

With the consumer spend in the UK games market topping £4.33 billion in 2016, this is now an industry rivalling the movies for licensing opportunities. But what are these opportunities and for which games? Dorian Bloch, business group director at GfK gave his insights at the recent Brand Licensing Europe.

Video gaming is big business and consumer spend on not just games, but hardware and accessories as well, is increasing year on year. The bestselling console games rival (and often exceed) takings at the box office for blockbuster movies.

For instance, when Grand Theft Auto V came out it grossed over £100m in its first week, compared to the movie Spectre, which is the biggest box office success in the UK, grossing just £41.3m in its first week.

“The gaming industry invests just as much time and money into the top selling triple A games as the film industry does into making movies,” said Dorian. “In 2016 the console game market was worth £1.15 billion, compared to £1.25 billion for the box office.

“But the other thing to remember, is that although movie franchises come and go, many of these gaming franchises have been around for years and years. Something like Grand Theft Auto V, which was released in 2013, is in the top 5 for sales all year round. Half the entire games market is generated by about 30 games.”

The top five franchises by accumulated revenue since 1995 (until Q2 2017) are (with value in brackets in £m):

1.    FIFA (£1504)
2.    Call of Duty (£1199)
3.    Mario (£762)
4.    Grand Theft Auto (£730)
5.    Sims (£421)
6.    Star Wars (£413)
7.    LEGO (£390)
8.    Need for Speed (£358)
9.    Pokémon (£330)
10.    Assassin’s Creed (£327)

In terms of licensing opportunities, these lie within accessories and toys. Toy and merchandise sales were worth £66.8m in 2016 (up 7.2% on 2015), while accessories and peripherals were worth £300.1m in 2016 (down 16.6% on 2015).

“Gamers want the best and they’ll spend on that,” continued Dorian. “There are some very niche accessories available like yokes and rudders for flight simulators, but also accessories with a broader appeal like headsets and controllers. We are seeing that revenue for controllers is up. The market is going towards premium controllers. People want to spend a bit more on a named brand.”

Touching on interactive toys (such as Skylanders), Dorian said the market has dropped but is not dead.

“The market is down 47% in 2016 on 2015, but that’s not to say it is over. Ubisoft’s Starlink coming out sometime next year will be one to watch for.”

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