T
ALL ABOUT
THE
APP
by Laurie Leahey
here’s a new phenomenon taking place in licensing and it’s happening right on your phone. Licensed iPhone apps (applications) and mobile phone games are the latest ways for consumers to interact with their favorite brands. Apps and mobile games are big business. Since Apple launched its App Store in 2008, the number of available apps has grown to more than 185,000, including apps for GPS navigation, cooking, and games. More than four billion apps have been downloaded. According to data from DFC Intelligence, a market research firm, the worldwide market for portable and mobile games is expected to grow to $11.7 billion by 2014. “As mobile games and the iPhone business started to grow, we saw the opportunity that that’s where people wanted to play our games,” says Richard Cleveland, head of marketing for Hasbro’s digital media and gaming division. “We want those brands to be available to people to play them anywhere, any time.” Consumers these days are busy people, but mobile phones are a constant in their lives. Cell phones, BlackBerries, and iPhones allow people to stay connected. “People have these handsets with them all the time and they can do a lot more with these devices than just talk on the phone,” says Justin Kubiak, director of product marketing for EA Mobile, which creates apps and mobile games for Hasbro. “When they don’t want to go through the hassle of pulling a board game out of the closet or setting up their Xbox, here they have this device where they can immediately be playing and own the game in, literally, two minutes, wherever they are.” Brand owners understand this consumer need for on-the-go interaction with brands and are changing their game plans in order to deliver. “What’s so key is that it’s not a question of what’s your online strategy or what’s your digital strategy. It’s now part of what’s your
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ROYALTIE$ JUNE 2010
clockwise from top left: Where’s Waldo app from Classic Media and Ludia, Fisher-Price Classic Chatter Telephone app from Ideo, The Price Is Right app from FremantleMedia and Ludia, and Scrabble app from Hasbro and Electronic Arts
strategy,” says Nicole Blake, senior vice-president, marketing and consumer products, Classic Media. “It’s really in every brand discussion—apps, social network, and everything for virtual goods. All those things are at the table at the beginning of your brand planning.” Many brand owners develop their brands into mobile games (though there are also licensed apps for books). James Slifer, vice-president of business development at The Joester Loria Group, says that it’s quicker for brand owners to enter the mobile gaming market as opposed to the video game market because “in mobile gaming, it could take anywhere from three to six months compared to the traditional console games that take 16–24 months [to develop]. It’s a much quicker process and revenues can be pretty significant depending on how strong the brand is.” With the average app or game costing consumers anywhere from $0.99 to $4.99, consumers are more apt to download something with a brand they know. “There’s a more immediate effect that an application has on [a consumer] because they already liked the other products, so there’s an assumption that they’re going to like this,” says Andy Rosic, CEO/owner of mobile game developer Thumb Arcade. “If you’re going to sell something at a cost, then you lower the hurdle of entry based on the fact that it’s a known brand. It’s much easier to convince the consumer to buy.” In a market of hundreds of thousands of licensed and non-licensed apps, well-known brands stand out. Mobile games and apps are a way for brand owners to reach a wide audience. Pew Internet issued a study in April stating that 46 percent of U.S. teens play games on their phones and the
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