Welcome to your very first edition of the Layer licensing newsletter, a new monthly newsletter breaking down all of the latest news and updates on brand collaborations, partnerships and licensing deals happening between brands and video games.
When games work with IP from popular artists, brands, or franchises they can create interactive experiences that deliver unrivalled fan engagement and player experiences.
If you’re interested in finding out just how they’re doing that, we’ll be delivering everything you need to know straight to your inbox, every month.
It’s our first newsletter, so let’s start by putting some context and numbers behind all of the licensing deals that are taking place in video games right now. Whether it’s virtual merch desks popping up in Fortnite and Roblox, the emergence of branded virtual worlds or famous video game items transforming into physical products, you might be wondering why there’s so much interest from brands in video games right now, so let’s take a look:
Virtual merchandise is all the rage. In the last few months alone we’ve seen fashion brands such as Gucci, Louis Vuitton, Burberry, Ralph Lauren, Givenchy and Nike (to name just a few) setting up shop in the metaverse and video games such as Roblox and Fortnite, but this latest collaboration between EA’s The Sims and Depop is unlike anything we’ve seen before, with the new ‘High School Years’ expansion introducing seller-designed virtual clothing into The Sims 4, which can be bought and sold through an in-game merchandising platform.
What makes this collaboration so impressive? It all comes down to knowing your audience, and The Sims 4 players are the perfect target audience for Depop. 61% of Sims 4 players are female, 54% of which are under the age of 24, according to Vogue, while over 90% of Depop’s active users are under the age of 26. This is one of the best gaming partnerships we’ve seen between Gen Z brands so far.
It’s incredibly on-brand, too. EA has launched an in-game app called Trendi that allows people to resell their clothes to other players on a marketplace, with players controlling how they price and promote their products.
Vogue says this ‘peer-to-peer platform is one of the first secondhand sites to dive into digital clothing and appear in a virtual world,’ but let’s not forget that in-game reselling platforms have existed in video games for a long time. Players have been trading weapons, armour and other cosmetic items in the MMORPG RuneScape since 2007 through its in-game marketplace, The Grand Exchange. We’re sure there are plenty of other examples, too.
Another thing that makes this collaboration interesting is how independent creatives get to benefit. There’s a lot of talk right now around barriers to entry into video games and the metaverse, but Depop has chosen fifteen sellers across the UK, US and Australia to create three custom pieces of merch that will feature in the game.
With Depop being a second-hand marketplace, there are some obvious challenges here around licensing and IP, but all of the designs that feature in the game feature looks that are ‘inspired by’ brands (presumably very carefully) to avoid any kickback from big names.
What remains to be seen is how much money Depop is making out of this deal, and how the Depop sellers featured in The Sims 4 are being compensated. Both companies declined to share financial details of the partnership with Vogue, but The Sims doesn’t make revenue from in-game clothing sales and sellers will benefit from the exposure, according to Vogue.
Ah, being paid in exposure. But in this case, it’s the best that creators will probably get. Unlike Roblox, Fortnite and many other online games, The Sims 4 doesn’t have feature microtransactions for typical in-game items, so the only time you need to dig into your wallet is if you want to purchase additional content such as DLC expansions.
This wasn’t always the case. The Sims 3 featured an in-game currency called Sims Points that could be purchased with real money to buy furniture and other items from an in-game store, but this caused so much controversy that EA decided to scrap it for The Sims 4.
You could consider this a missed opportunity. Zara Larsson has made over $1m in virtual merchandise sales in Roblox(and that’s after the % cut that Roblox has taken), but microtransactions never seem to be too far away from controversy in the gaming world. Things could change, though… maybe? This expansion doesn’t launch until the end of July so there aren’t any details (yet) on how players will pay for these items. Watch this space.
Now that Epic has started rolling out its Creative Toolset for Fortnite creators, expect to start seeing a lot more branded worlds appearing in the Game. Hondaverse (see what they did there?) is one of the latest, featuring a series of custom (yet-to-be-released) online maps designed around parkour challenges/gaming experiences and trivia questions.
One important thing to point out here is that Hondaverse hasn’t been developed in collaboration with Epic, which is probably one of the reasons there aren’t that many people talking about it online. That said, we wanted to dive into this activation anyway because it’s certainly an interesting example of a brand that you wouldn’t associate with gaming audiences tapping into a younger demographic.
There’s a focus on Twitch here, which gives out some confusing messages, but MarketingDive point out, Honda does have experience activating marketing campaigns via its Twitch channel. For Hondaverse, the Japanese manufacturer collaborated with SypherPK, a popular streamer with over 5m subscribers on YouTube and 6m followers on Twitch.
The campaign was activated through a live stream with SypherPK, where he basically explored Hondaverse while the developers are still building it. MarketingDive, who broke the story, says that players will eventually be able to explore the world and compete with each other, but launching a campaign in this way without opening up to players at the same time is a strange way of doing things.
While these maps aren’t playable yet, this video with SypherPK does provide an interesting behind-the-scenes look at how custom Fortnite maps are designed and what can be done with them, so we’d recommend watching the video to take a look at what’s possible when it comes to developing worlds in Fortnite (if you know the right people, of course).
At the time of writing, the video is closing in on 300k views. Honda should be happy with that if it’s getting them in front of new audiences – especially as there’s a HUGE Honda HR-V parked up in the middle of the map – but we’ll have to wait until the maps are officially launched to see how Honda is going to monetise this motorised metaverse.