Video games: Tie-ins largely untapped

There's no better cure for a serious case of Nintendo thumb than more gaming. At least that seems to be the sentiment these days. Since the launch of last year's triumvirate of next generation console game systems - Microsoft Xbox, Nintendo GameCube, Sony PlayStation - new titles keep springing up. More games mean more gaming, and they also mean more marketing opportunities.
Video games have long been a preferred teenage pastime, much to the chagrin of parents. Why play a real game of basketball when you can be Kobe Bryant on your TV? Or a pro skater? Or a Jedi Knight?

There’s no better cure for a serious case of Nintendo thumb than more gaming. At least that seems to be the sentiment these days. Since the launch of last year’s triumvirate of next generation console game systems – Microsoft Xbox, Nintendo GameCube, Sony PlayStation – new titles keep springing up. More games mean more gaming, and they also mean more marketing opportunities.

Video games have long been a preferred teenage pastime, much to the chagrin of parents. Why play a real game of basketball when you can be Kobe Bryant on your TV? Or a pro skater? Or a Jedi Knight?

Since 1998, video game sales in Canada have grown from $376 million to $622 million. Industry projections expect a 28% increase in the 2003 fiscal year, when sales are expected to reach $800 million. In the U.S., video games sales are up to US$9.4 billion, a full billion dollars more than movies, which generated a measly US$8.4 billion last year.

Many companies – running the gamut from professional sports teams to soft drink makers – have tried to zero in on teen gamers through traditional means like product placement. However, there’s still much to be done in order to capitalize on the throbbing-thumb generation.

‘The thing about gaming is that its popularity propagates primarily through two means: huge introduction campaigns that precede product launches and word of mouth,’ says youth marketing specialist Greg Skinner in Toronto. ‘It’s too hard to reach gamers individually, so bring them together.’

One way is to organize sponsored gaming nights, where marketers can put on an event, display their message and keep their captive audience happy. ‘Large scale gaming nights where you bring the gamers together and they battle it out until a champion is crowned would be stellar,’ Skinner adds. ‘You would hold them once a month, in a nice controlled environment, like [lakeside mega-nightclub] The Docks in Toronto, where parents can also stay and chill if they want. It offers a significant opportunity to do cross promotion, product tie-ins and brand development.’

Unfortunately, marketers don’t always think in such grand terms.

While the trend over the last few years has focused narrowly on logo and ad placement in sports games, it has been out of necessity rather than marketing genius. Gamers are more sophisticated; as the graphics improve so do their demands. Ten years ago it was acceptable to play a sports game where, for example, an NBA team plays another in a generic arena. Now, teens insist on playing the Raptors in the Air Canada Centre with real ads like the Sprite Zone in full view to boost the game’s realism.

Activision’s top-seller, the Tony Hawk Pro Skater series, is besieged with brand names ranging from shoemakers like Vans and Ethnies to clothing lines like Quiksilver to Chrysler’s Jeep Wrangler and Liberty. Meanwhile, popular outfitter Diesel had its logo pasted on billboards and bumper stickers in Reflections’ car chase game Driver 2. According to Forrester Research, video game product placements will generate US$705 million by 2005 in the U.S.

Authenticity is the name of game, and yes, that’s good news for a company like Sprite or Chrysler, but there are more ways to spread a marketer’s message than simply digital logos in the stands of a video game.

THQ is taking a novel approach with its newest title, motocross race game MX Superfly. The plan is to share promotional responsibilities with Tang, the perennial powder juice drink. When thirsty teens purchase two canisters of the drink they will be entitled to a coupon for $10 off MX Superfly, and there are plans for the game to be featured in Tang commercials as well.

‘Tang wanted to make their brand cool and since we target the same teen age group as them, it was an easy fit,’ says Laura Naviaux, product manager at Calabasas Hills, Calif.-based THQ. ‘It’s going to help broaden their reach.’

In concert with the commercial campaign, there will be an aggressive print push as well, and Tang’s logo is featured prominently in the game on ramps and billboards.

Games like MX Superfly are full of logo placements for equipment makers of motocross helmets and goggles–Naviaux estimates that there are 15 to 20 different brands. But, while it makes sense for game-makers and packaged goods marketers like Tang to team up to help each other reach the teen market, there are still many opportunities left unspoiled.

Games also tap into another popular teen entertainment tie-in: music. ‘With the sophistication of the new consoles, music has become a key element. It used to be the story, game-play and graphics that sold a game, now you can add music to the mix,’ explains Ron Bertram, VP and GM of Nintendo Games Canada in Vancouver. ‘I see it as the same trend as movie soundtracks. In Japan, the music CD for Pikmin [an action adventure game for the GameCube] sold 750,000 copies.’

Music to the ears indeed. However, even though Bertram says Nintendo might market the music of a new Metroid title in the coming months (there’s no official release date yet for the newest version of the classic action adventure title), he says that marketers are far too slow to jump on opportunities for tie-in promotions.

‘Most gamers know we’ve got a new Mario game coming. There’s tremendous, pent-up interest in chat rooms and the like, but no one has approached us for a tie-in promotion,’ he laments, adding that usually the marketers come calling way after the hype has subsided. ‘They don’t seem as plugged into the video game hype as much as movies for example. The gamers know the latest buzz, but the marketers don’t.’

Top video games by Canadian sales

Platform Title Company

Xbox WWF Raw is War THQ

PlayStation 2 Grand Theft Auto III Rockstar

PlayStation Driver 2 GTI

Nintendo 64 Super Smash Bros. Nintendo

GameCube Super Smash Bros. Melee Nintendo

Gameboy Advance Super Mario World: Nintendo

Mario Advance 2

Gameboy Colour Pokémon: Crystal version Nintendo

Dreamcast NHL 2K2 Sega

Source: ACNielsen Video Game Tracking Service

Rankings reflect sales for February, 2002