Activision, Disney, Hasbro Ignite New NFC Market

Hello, my name is Adrienne, and my son is a video game addict.  He’s only 8, but he loves games for iOS devices, the Wii, Xbox 360, and online Flash games.  But the game that has inspired the most “gotta-have-it” mania, and the most dollars leaving our pockets, has been Skylanders.  If you’re the parent of an 8-10 year old boy, you probably just groaned in sympathy as you read that last sentence.  If not, then here’s the short version of what has become Activision’s latest $1 billion game. Skylanders is a video game that is playable on all the different platforms (with the appropriate software), but it’s the real-world collectible component that has really taken off.  Skylanders is played with a platform onto which a player can put their character, and that figure comes to life onscreen.   The platform has a wired or wireless connection to the game console, and the figure has an NFC connection to the platform.  Each figure remembers any points or achievements it earns, so that it can be taken to a friend’s house and played there. Skylanders has taken the “toys to life” category to a whole new level.  It passed the $1 billion worldwide retail sales mark in 15 months, with half of those sales in the U.S. alone.  Activision has sold 100 million Skylanders units, encompassing software, individual characters, and three-packs.  In fact, Skylanders is outselling standard action figure toys now.  These things are highly collectible, even though they sell for $9 to $15 each.  Skylanders was released initially in the fall of 2011, and they have settled into an annual update schedule.  Skylanders Giants was the first update, with some characters lighting up when placed on the “portal of power”.  The next update will be fall of 2013, with “Swap Force” introducing characters that have two pieces which can be mixed and matched to create different character combinations. The popularity of Skylanders has inspired other companies to join the market.  In June, Disney will release “Disney Infinity” which will be very similar to Skylanders, playable on all consoles and mobile devices.  Disney’s advantage is its extensive catalog of characters and story lines to draw from.  Part of the game will allow players to place a character from one world into another (such as putting Jack Sparrow from “Pirates of the Caribbean” into the “Incredibles” world).  This offers extremely compelling game play, and has already fired up the imagination of my son so much that this game is the number one thing he wants for a birthday present. Major toy company Hasbro is jumping in the market with a similar toy that will work only with mobile devices, both Android and iOS.  The characters are based on the B-Daman marble battling line from Hasbro.  The player scans the figure using an app on their mobile device, which brings the character into the digital game. Semico believes that this trend will continue with video games as more physical characters and cards become companion devices to video games and apps across all platforms.  Moreover, NFC has the potential to see huge growth in the toy industry as it adds an intuitive “cause and effect” capability that even toddlers can grasp to virtually anything, and it’s inexpensive as well.  Remember that the Wii U already has NFC built into it, and Nintendo is working on games that will incorporate NFC in cards or toys to go along with the game. This trend will go beyond toys and video games as well to rewards programs, marketing and branding programs.  Flomio is a company that produces 3D printed objects with embedded NFC tags.  They have made NFC 3D printables for the gaming company, Plow Games, creating sticky marketing campaigns for brands like Audi and Klondike.  Players collect points, build out their cloud profiles, and the games identify them wherever they go.  This could be the next generation of “Happy Meal Toys” from McDonalds. NFC is an exciting technology because it enables so many new user experiences, like Skylanders, that are proving to be very lucrative for the companies that utilize it.  Semico believes NFC has a bright future ahead of it, and has recently released a study on NFC.  For more information, contact Rick Vogelei at rickv@semico.com.