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Licensing video game characters

There's a sales figure that is thrown around a great deal in the video game industry-one-million units-referring to how many games must be sold before the licensing of a property is considered viable. But lately, licensing programs are being undertaken not...
June 1, 1998

There’s a sales figure that is thrown around a great deal in the video game industry-one-million units-referring to how many games must be sold before the licensing of a property is considered viable. But lately, licensing programs are being undertaken not only before the one-million sales mark is reached, but, in some instances, in advance of the launch of the game itself. The objective of such early licensing efforts, according to Charles Riato, executive director of the Licensing Industry Merchandisers Association (LIMA), is to help generate sales for the game’s launch.

‘Video game makers are out there starting the licensing programs even earlier-they don’t necessarily want to wait for the one-million sales mark,’ he notes. ‘This strategy aims to help generate sales of the video game.’ One case in point is Nintendo’s Japan-originated Pokemon game, which is handled by the licensing agency Leisure Concepts. According to Riato, Pokemon is considered to be one of the hot U.S. launches this year in the video game category. The licensing campaign is slated to hit at retail simultaneously with the game.

Another hot video game licensing campaign launching this season is for Tomb Raider by Eidos Interactive and licensed by Viacom. Unlike Pokemon, the licensing of the game’s Lara Croft character was undertaken only after the one-million sales mark was long surpassed by this property, which targets older teens and young adult boys.

A newcomer to the licensing arena is video game maker Crystal Dynamics, based in Menlo Park, California. The company is currently choosing a licensing agency for the title GEX: Enter the Gecko, which launched for Sony PlayStation in February. The PC CD-ROM version of GEX: Enter the Gecko is slated for release in the second quarter of 1998 and the Nintendo 64 version for this summer.

‘I think two things need to happen [before licensing can take place],’ says Scott Steinberg, vice president of marketing for Crystal Dynamics. ‘One, the game has to be a commercial success. Secondly, the video game platforms [Crystal Dynamics only builds games using the Sony PlayStation] need to sell enough machines into homes to make it viable.’ Following conventional wisdom, Steinberg cites the one-million-units-sold figure to gauge when a character from a video game becomes licensable. However, plans for the licensing of GEX are already under way, before that mark has been reached.

‘Within the first month [of a property launch], you know the trend of the game, whether you’ve got a hit on your hands,’ says Steinberg. If the launch is successful, as GEX’s was, plans to license the leading character or characters begin. In the case of GEX, an action figure line will be the first program to be implemented, as soon as a licensing agency is chosen.

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