First published in The Bugg Report

While always a significant part of the Asian licensing industry, character and entertainment as a category has recently enjoyed a considerable boom in the region. In 2013, close to 40% of toys and games sold in Hong Kong were licenced, and in China, one of the worlds’ most dynamic markets, the video games category increased by 8% to eventually reach a total of HKD 2,709 million. Recent reports[1] maintain that continued growth is to be expected in coming years; nevertheless, traditional toys and games manufacturers are acknowledging the increasing threat from a rapidly developing digital apps and video games segment. We are currently experiencing a shift from the physical to the new media universe, having a considerable influence on consumer behaviour and purchase patterns across a wide array of territories and industries.   

This movement is not restricted to the Asian territories, but even so, it had a noticeable impact on this year’s Hong Kong International Licensing Show, which I was fortunate enough to attend earlier this month.  Several new media properties, both local and international, were represented on the exhibition floor, with impressive booth designs leveraging the unique graphics and innovative nature of the games. Developer studio, PopCap Games, had a particularly good-sized stand showcasing the globally renowned Plants vs. Zombies brand: an indicator of the overall interest for these types of properties in Asia. As digital licensing continues to gain momentum, traditional entertainment brands will have no choice but to reinvent their offers to better meet the needs of a whole new type of audience.

Nevertheless, despite their significant presence in the exhibition hall, video games and mobile apps were not the only digital influencers in Hong Kong. The fair saw an abundance of manufacturers showcasing technologically innovative toys, the stand-out example being camera-fitted drones hovering over the floor. Chinese technology company, DJI, which recently catapulted to international fame with its Go-Pro compatible Phantom quadcopters, had a significant presence at the show, and several other manufacturers seem keen on following their lead, with smartphone connected models straddling on the line between drones and remote-controlled toys. Regardless of recent months’ heated discussions about the security and privacy related risks in using these devices for commercial purposes[2], I expect that quadcopters will have a significant influence on the toy industry going forward.

Furthermore, personalisation is an important trend which is bound to have a continued impact on how consumers relate to their favourite brands and properties. Technological innovations related to 3D printing enable fans to actively engage in the creation of product, laying the foundation for an emotional connection which is so much stronger than had they merely picked it up from a shelf.  In the near future, the majority of customers will come to expect greater involvement in the manufacturing process and this will, of course, significantly change the creation and distribution of toys and other items. These tendencies were all very clear at Hong Kong International Licensing Show, where several 3D printing companies showcased their offers by incorporating scanner booths into their exhibition stands.

Overall, it is clear that technological innovations, as well as developments in the realm of digital entertainment, will continue to drive the licensing industry in Asia and beyond. Traditionally, trade shows I attended would be jam-packed with large entertainment franchises such as Disney, Nickelodeon, Marvel and Cartoon Network. Although these giants still dominate a considerable chunk of global exhibition floors and retail shelves, it is refreshing to see how the addition of digital newcomers is shaking up the fundamental dynamics of the licensing industry. If 2015’s Hong Kong Licensing Show is anything to go by, I foresee a continued surge in interest for innovative technologies and new media properties in the year to come.

Dan Amos is Head of New Media of Tinderbox, the dedicated digital division of leading global brand extension agency, Beanstalk. For more information, visit www.tboxgency.com or follow us on social media:

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[1] Source: Euromonitor
[2]
Source: http://www.dailymail.co.uk/wires/pa/article-2802373/Concerns-raised-use-drones.html