The gaming industry and the potential for brand collaborations

As a member of the Reddit community, I constantly see artistic images created by the many users on Reddit. These artistic designs give me ideas for how brands can collaborate with each other and introduce a new market for them both.

This image became quite popular on Reddit with 23,000 upvotes and 422 comments as someone geared up a character in the game (Octane) with a pair of Nike trainers. It gave me the idea that more brands should collaborate more with the video game industry because it is becoming one of the largest markets in the world. In 2017 the gaming industry made around £94 billion (Venturebeat) and in 2018 is reportedly made £110 billion (Gaming Industry) and predicted that profits will reach £146 in 2021. This indicates that the industry is growing and a potential for brands to tap into allowing them to target a larger and newer audience.

Chief Executive of Netflix, Reed Hastings claims that he see's a game like Fortnite as more of a competitor than HBO because of it's ease to use and play and it's entertainment ability attracting kids and young adults (Tech Crunch). This indicates that the big dogs of the online entertainment industry see the validity of the gaming industry and it's ability to attract a large audience.

2 examples of brand collaborations with gaming companies:

(Extract from a previous blog) August 23rd became a day that gamers and tech enthusiasts loved. The introduction of the new Samsung Galaxy note 9. This might not seem too exciting but when the CEO of Epic Games came on stage and announced that if you buy the new NOTE 9 and TAB S4, then the would be able to receive a very rare Fortnite skin called Galaxy.

A good example of a luxury fashion brand and video game is when Final Fantasy collaborated with Louis Vuitton in 2016 (TheHypedGeek) and made one of the in game characters a model and muse for the fashion brand. Unlike other brand collaborations of the past who just made clothing products with the games logo and charaters, Louis Vuitton went a step further and got even more involved with the game.

These two show how well brands have collaborated and shown the creative ideas designed to attract a newer audience for the brands.

My idea:

Using the image above as inspiration, I suggest that a company like Nike or Adidas should collaborate with EA Sports to feature their products in the game; Apex Legends. It could be a way to promote a new line of trainers about to launch or create an Apex Legends specific pair of trainers and promote them in game. Other items of clothing could still have potential but I would recommend using trainers because a lot of users would rather trainers instead of some other type of clothing. The way that it could be promoted in game would be via a DLC pack for £5.99. Included in the pack would be a customizable character outfit with the trainers, a gun charm, 600 Apex Coins and an audio track of one of the characters referencing the trainers.

As of October 2019, Apex Legends had around 70 million users (Cultured Vultures) and by the way that they gaming industry is continually growing, it is likely that there are a lot more users than in October.

Revenue forcasting:

(based off 70 million users)

For example, if a pair of trainers were to be promoted in Apex Legends and sold for £70 here is the return on revenue from a percentage of users who buy the product:

0.1% = £12 million

0.5% = £24.5 million

1% = £49 million

5% = £245 million

If the DLC was introduced at £5.99 here is what a return on revenue from a percentage of users who buy the product:

0.1% = £420'000

0.5% = £2.1 million

1% = £4.2 million

5% = £21 million

10% = £42 million

For such a small promotional method, it could provide very beneficial for each company to delve into a new market whilst also recieving a large amount of revenue. This is just one of many possibilites that brands could collaborate with but it's exciting to see what happens in the future.