Iconicfuture believes in the virtual future. The German startup hopes to be a matchmaker that puts together the owners of brands with developers who want to use branded virtual goods in their online games. It is doing so by setting up a digital marketplace where licensors and licensees can cut a deal.
The Hamburg-based company is the brain child of Ze’ev Rozov (pictured right), chief executive of Iconicfuture and a 17-year veteran of the media and online games industries. It is a logical outcome for the free-to-play game industry, where users play games for free but pay real money for virtual goods. If developers can get attractive items, such as the Lady Gaga virtual goods in Zynga’s FarmVille game, users will pay real money for the items. As crazy as that sounds to outsiders, virtual goods is already a $1.25 billion industry in the U.S.
In the marketplace, a game developer can search for the best branded item that they can use inside a game. The legal permissions are either pre-specified or worked out in negotiations. At the end, developer and licensor can share revenue related to selling the virtual goods in games.
One example is Shaun the Sheep, a British stop-motion animated character produced for TV shows. Bigpoint recently used Iconicfuture to license the rights to Shaun the Sheep in its popular Farmerama game. In an interview, Rozov said it normally takes too long to figure out licenses for games, especially online, social network, and mobile games that have much shorter development times than traditional console games. Figuring out the legal issues such as territorial or platform rights is often a hold-up, as are terms for sharing revenue.
“We want to streamline that,” Rozov said. “Licensors are often looking for a minimum amount of performance, but you often don’t know which items will sell well. It’s a long negotiation.”
But those who can get it right can improve the monetization of both brands and games. One Facebook and web game, Sports City, has steadily been adding rights to premium soccer clubs across Europe. In the city building game, users create cities, manage teams, and build their own stadiums. They get a lot more excited if they can build a stadium based around a license, Rozov said. Created by Spanish company Zed, Sports City will launch this week with items such as the San Siro stadium in Milan, available for 50 Facebook Credits, or 3.50 euros. Other customers include ACM, Aardman Rights, and Zen Studios. For each deal, Iconicfuture gets a cut.
Iconicfuture is the sister company of sports marketing firm Triumph Media Group, which incubated the startup. Rozov was vice president of digital at Triumph.
“We saw an opportunity to expand in this area and set the company up in February,” he said.
The company has nine employees and funding from the backers of its sister company. It is not raising outside money now. Competitors include those game and brand companies that can negotiate directly. Zynga did that recently when it licensed the Indiana Jones character from Lucasfilm for Zynga’s Adventure World game.
The video game industry went through its own licensing cycle in the past. Movie-based games were popular for a while, until they became associated with poor quality games. Then they fell out of favor. But Rozov said that casual gamers who play Facebook games may put the emotion around the brand equity ahead of any quality concerns for virtual goods.