Video game players and communities are some of the most passionate and engaged fans in the world.
Nowadays, game developers monetize their games through digital products. It’s easy to understand why when the market for digital In-App-Purchases (IAPs) is valued at $37B and giants like Supercell are pulling in over $2.3B in revenue through in-game digital purchases alone.
Digital products are great, but often lack a tangible sense of connection and feeling for gamers. We simply consume them and they pass through our lives as quickly as they are purchased.
But with fans already spending anywhere from $1 to $5 on in-game digital products, forward-thinking companies are experimenting beyond digital with $50+ physical products for their fans. The tactile experience for customers and revenue potential for studios are attractive–especially with the collectables market eating into digital with a market value of $13B. For example, this is why Rovio generated more than 40% of its $200 million revenue through licensing official Angry Birds merchandise.
With gamers playing longer, with more passionate fan followings, and manufacturing companies easier to access than ever, physical merchandise isn’t just making a comeback.
It’s taking on a new role in the gaming industry.
The Past and Present of Gaming Merchandise
There’s something to be said about owning a physical piece of a game. You can hold it, feel it, and connect with it. It’s something that isn’t necessarily consumable, but can instead live in your home or on your desk, as a constant reminder of your favorite franchise.
It’s like the shirt you own from your favorite band. You don’t need the shirt to enjoy the music. But as a fan you want to own it because it lets you share your passion and love for the band with the world.
Physical merchandise and collectables date back to the Atari 2600. Activision was well-known for providing achievement badges when players reached certain levels or high scores. All you had to do was take a picture of your TV screen and mail the photo to the address listed in your game booklet. For Activision, this was a way to celebrate their most dedicated fan’s achievements, and give them a small keepsake to brag to their friends.
More important than celebrating high-scores, though, these patches allowed Activision to connect with their fans in a new and exciting way: in the real world.
We’ve seen a large growth recently in game developers combining both digital and physical products to further create a more immersive gameplay experience, as well as help their players better connect with the stories and characters of the games they play.
Take Campo Santo’s Firewatch: a great example of how video games aren’t just about defeating bosses and collecting coins, but offering a fully immersive and beautiful art experience.
Connecting with a part of their gameplay experience, Campo Santo allowed players to print photos they took with their “disposable camera” in-game, and ship them to their house.
This proved to be extremely lucrative for the small studio with 1,000 sets ordered in the first month at $15 per set (I’m sure you can do the math, but that’s more than $15,000).
Bungie recently used merchandise to generate buzz around the release of a new Destiny DLC. Fans of the franchise were shocked when they landed on the Bungie store to find a new Destiny shirt priced at a whopping $777,000.
Now, of course the shirt wasn’t actually $777k. In fact, you couldn’t really even purchase the shirt. But if you played through the new Destiny DLC, you received a promo code that gave the player a $776,975 discount on the shirt. Only players who unlocked a Guardians Achievement could get the shirt for $24.99.
Through achievement-based in-game merchandise, Bungie successfully bridged the online and offline world, incentivising players to download and complete their newly released DLC for, not just an exclusive t-shirt, but bragging rights.
Blending The Online and Offline World Through Physical Products
A good way to understand the benefits of selling merch in-game is by comparing it to merch in the music industry: if you want a shirt from your favorite band, it’s unlikely you’re going to seek out their online merch store and buy it. However, if you’re at a concert for that band, you’re more likely to purchase a shirt from the merch booth.
It’s all about context and being immersed in the experience.
The same goes for in-game merchandise. As a player, I’m less likely to seek out or be aware of an online merch store for my favorite franchise. However, if I’m shown merch while I’m still in a game, I’m much more likely to purchase something.
On July 20th, Snowman launched an update to Alto’s Adventure, including a fully implemented in-game store using the Shopify SDK for Unity.
Fans of Alto’s loved the addition of the in-game store, allowing them to discover new and fascinating products they may not have known otherwise had existed.
In only a month after launching the in-game store, Snowman made over 60% of their previous year’s merchandise revenue and saw 75% of net new sales come through the in-game storefront.
These are surprising results when you consider that Alto’s Adventure is a 2-year-old game, selling for around $5.
You can read the Alto’s in-game merch case study here.
If the history of commerce has taught us anything, it’s that the closer the point of purchase is to the point of engagement, the more likely people are to buy. And games engage our attention like nothing else, some for even hundreds of hours on end.
It’s Never Been Easier to Monetize with Merch
We’re living in a time where creating toys and collectible merchandise isn’t only confined to major AAA publishers like Activision or Disney. It’s never been easier to create merchandise for your video game, and we’ve seen an explosion of major indie games that are including merch in their sales strategy.
A common misconception about merchandise is that you need to store shirts and mugs in your basement in order to sell them. But dropshipping and print-on-demand services allow you to create products only when they’re ordered for a seamless experience for both the game developer and the player who purchases from them.
Whether you’re looking to create shirts and apparel, or custom figurines and plushies, there’s a handful of services that can do this for you in order to save time and money.
If you’re interested in selling shirts, prints or other apparel, Printful or Gooten are great solutions. With tons of options to choose from, you can simply upload your game logo or character images, and they’ll handle the rest.
For more customized merch options, services like Happy Worker, FanGamer, or iam8bit are a great place to start. They’ve worked with tons of game developers to create custom merch from figurines to plushies. Best of all, they provide a marketplace for your products, so you don’t have to worry about setting up your own online store.
Get Started Today
For game developers, physical products unlock a new and lucrative form of in-game monetization with endless options for integration, from in-game storefronts and purchasable user-generated content, to achievement-based unlocks.
Physical products bridge the gap between the game world and the real world, and allow players to connect with the games they play and love in new and exciting ways.
There’s more to come! Follow us for updates and content on the future of commerce in video games 🎮