Disney has just announced its Infinity video game that works with physical figures, and other games publishers have hinted at introducing something like Skylanders. Do you welcome the competition?
Oh definitely. We think we've invented a breakthrough innovation and a new 'toys to life' play pattern. So certainly other toy manufacturers and our traditional video game competitors might be looking at what we've done and it might give them some ideas.
We are really looking forward to hearing more about these new concepts and ideas. We feel we've invented a new play pattern. If other publishers and companies want to enter this category, we'll welcome them, obviously. Competition is always very stimulating for us. We'll continue to innovate and push our studios to deliver great game experiences.
The success of Skylanders is not only one element, it's not just about bringing toys to life. It's also about the story and experience you deliver – this is important and something we've invested an enormous amount of money into to make a great game. I have to say, that's not going to be easy to duplicate.
It certainly has been an incredible 12 months for Skylanders. What's the secret to its success?
We feel we've invented a new 'toys to life' play pattern, thanks to the great innovation from our game studio Toys For Bob in California. They had a vision when they started to work on the game a couple of years ago, to combine the toys and games play patterns together: a breakthrough innovation.
We've invested a lot. We've worked with the Toy Story scriptwriters and some of the best character designers in Hollywood.
Regarding the quality of the toys themselves and the manufacturing process, there's a lot of attention-to-detail on the painting. We wanted to deliver a triple-A quality from every touch point, from the video game itself to the toys.
Skylanders has very strong replay value as you can expand your experience with the adventure packs or battle packs. So that's why we feel it's been such a great success.
How has Skylanders Giants sold in the UK compared to the original Skylanders?
If you compare the launch quarter of Spyro's Adventure to the launch quarter of Skylanders Giants, we're enjoying a massive growth, both in terms of the starter packs and the toy business. We can't quantify the growth percentage yet.
It shows the franchise is growing, and new players, families and kids are entering it, which we're very pleased with.
You've now just announced Skylanders Swap Force. But what about stockists and fans of Skylanders Giants – what can they expect to see this year?
For Giants specifically, we'll be launching new characters through the year.
What do you think about rare Skylanders figures being sold on auction websites like eBay?
It's something we don't control or encourage. It's something we can't prevent when there's a scarcity. It happened on a couple of occasions last year when we introduced a new range of characters and suddenly they become scarce. We were surprised by the level of sell-through and we had to replenish very quickly.
Sometimes we have an out of stock situation. We created scarcity and then this phenomenon you've seen on eBay happens. That's the nature of a new business with such incredible success.
What scope is there for more officially licensed Skylanders products?
We have already more than 100 licensing partners and licensees worldwide in different categories including apparel, home décor, party goods and board games. The licensing partners have been very pleased with the licensing programmes, for example Penguin and the Skylanders books.
We're also trying to be very selective; we've been approached by many different companies and categories. We want to make sure it brings added value to the overall Skylanders universe. But so far, within a limited amount of time, we've got a very strong licensing programme. There are also brand partnerships we're very well advanced with. One deal will be announced very shortly with a major global brand.
Are you any closer to turning Skylanders into a TV show or film?
The ambition for Skylanders is to make it one of the biggest entertainment franchises in the years to come.
We've been approached by TV and film production companies, but for the moment we have not yet seen a project we're very excited by, and feel will be another great touch point with the same level of quality as the video game.
We have a lot of stories to tell in the Skylanders universe and video games. It doesn't mean we won't explore this opportunity in the future.
How does the toy market differ from the video games market?
It's been a learning process. The toy market has different key players than traditional video game or grocery channels, so you have to establish new relationships and the approach to business may differ a little bit. The good thing about toy retailers is they've always worked behind big franchises. They create aisles, bays, feature walls and all these kind of things where they've been used to combining products with licensing programmes.
They create a full experience with different touch points for the same brand, and that's exactly where we want to go with Skylanders.
We heard that the marketing campaign for Skylanders Giants dwarfed any other toy launch. What kind of investment did you actually make?
I can't compare it to what other toy companies are doing and I don't want to undermine what they're doing. We respect them very much. At Activision when we launch a new IP we have a vision for many years to come.
We wanted to make Skylanders one of the biggest entertainment and pop culture franchises. In order to do that, you have to invest massively in your first year of launch. And it's an always-on strategy throughout the year in media, digitally, socially and very importantly at retail, where we've invested into permanent bays, areas and interactive units which cost a lot of money to maintain and refresh.
Why launch Skylanders Battlegrounds on iOS?
We want players around the world to have as many possible experiences with the brand and the toys. This cross-platform approach to the characters, for example the fact that you can level up a character on Wii and play it with your friends on PS3, is a key part of our strategy. We're very pleased with the apps and online game.
Is Skylanders more than just a kids' craze? Will it be around for years to come?
It's one of the biggest entertainment franchises for kids and families.
We'll continue to innovate on every possible touch point, whether it's the mobile game, iOS app, console game, the toys, character design, music.
The feedback we're getting from parents, kids and critics is very positive, and that's what matters most for us on top of the commercial success.
Our fans are really enjoying the games and toys, so we're delivering fun. As long as we keep doing that, Skylanders has a bright future.
We've been very humbled by the awards we've received like the Kids' BAFTA. It's a great motivation for us and our studios to keep investing and innovating in the Skylanders franchise going forwards.
WHAT IS SKYLANDERS SWAP FORCE?
Activision announced its third Skylanders video game last month – Swap Force.
Where Spyro's Adventure introduced toys that can connect to a console, and sequel Giants added larger figures, Swap Force brings interchangeable toys to the mix.
It is expected to launch this autumn.
Children will be able to connect the top half of one figurine with the bottom half of another, to create more than 250 unique combinations. This will give the in-game characters different powers.
There will be 16 new Swap Force characters, along with 32 core Skylanders characters (16 new and 16 tweaked versions of fans' favourite characters from previous games), as well as eight new LightCore characters.
"With Skylanders, we didn't just create a beloved new franchise, we actually created an entirely new category that brings the world of physical toys and video games together like never before," says Eric Hirshberg, CEO of Activision Publishing.
"And now with Skylanders Swap Force, we are pushing the genre we created forward with another big innovation: customisation.
"The idea that kids can customise their own characters in the physical world, and have their unique combinations recognised in the virtual world, is an idea as big as the concept of bringing toys to life itself."
All the current figures will work in Swap Force.
