GamesBeat

How Activision plans to beat Disney with the marketing of Skylanders: Swap Force (interview)

Skylanders: Swap Force will debut this fall as the third in the series of game-toy hybrid products that have sold more than $1 billion worth since 2011.  The new game has interchangeable body halves of Skylanders: Swap Force toys, allowing kids to mix and match their collections to create new kinds of game characters. Activision hopes that will lead to more repeat business at a time when it will face significant competition from Disney’s upcoming Infinity toy-game hybrid products launching in August.

In this market, Activision is the smaller company, but it has the advantage of having sold more than 115 million Skylanders toys.

The challenge for Activision’s marketer’s — Josh Taub (left) senior vice president of product management, and John Coyne (right), senior vice president of consumer marketing — will be to grow the franchise at a time when Disney attacks the same market using famous entertainment brands such as Toy Story, The Incredibles, Monsters Inc. (and the upcoming Monsters University), and Cars. Activision Blizzard chief executive Bobby Kotick said in a recent earnings call that the company will face significant competition in the second half of the year, making financial performance less predictable. Activision is going to spend more money marketing its titles later this year, and that means there’s going to be a lot more pressure on Taub and Coyne to execute.

Here’s the edited transcript of our interview with Taub and Coyne.

skylanders-swap-2GamesBeat: You’ve built up something pretty big in a couple of years here.

Coyne: Yep. We’re very proud of the growth that we’ve seen for Skylanders in about 18 months. We’re now over a billion dollars. For myself, I’ve been involved with the franchise now for more than four years. It’s been a great project, seeing everything come to fruition.

GamesBeat: You have competition coming from Disney Infinity. What does that mean for you?

Taub: It means that we have to continue to focus on where we started and where we’re going. We’ve innovated a category, bringing toys to life. We’re focused on what we’re doing. We’ve sold more than 115 million toys to date. We have kids playing on nine-million-plus starter packs. We’re focused on providing them with an innovative experience in the franchise, and we’re focused on doing what we do best, which is bringing a great video game experience and a great toy experience together.

GamesBeat: Obviously you have a really good margin for add-on sales after the base pack, especially with your great relationship with retail. The setups in Toys R Us are amazing. But there are 60 new toys coming out this season. That’s a significant amount of product. Is there a point where you worry that you’re going to get pushback from consumers when it comes to the number of toys being released?

Taub: I think what’s happened is that the consumers are actually telling us that they have an appetite for things that feel special to them, and the ways of interacting that are unique to the game. What they’re doing through buying the toys is having different engagements with the franchise as a whole. We’re not seeing at it as “there’s a saturation point.” We’re seeing it as there’s place where kids want to continue to come back through the year, and rather than buying the next game, they’re buying what is in a sense add-on content to experience the same game in a different way. Each time they put a new character on and have a different weapon or a different play pattern, it gives them a unique experience that they’re not getting anywhere else. We’re not seeing saturation as an issue. In fact, our attach rates are up from the first game to the second. We anticipate that will continue.

GamesBeat: Can you give us any specifics on what those attach rates are?

Taub: At this time, we can’t.

GamesBeat: Has the demographic shifted any since launch? It does seem like, just anecdotally, as it’s become a bigger deal, more people have come in from a broader audience saying, “This isn’t just a game for my eight-year-old.”

Coyne: I think there is a core still, but I do think it’s something that gamers are enjoying — the toys coming to life, the characters. Families enjoy it. Girls as well as boys enjoy the game. It really is quite a broad demographic that we’re seeing enjoy the game. I hope that, with the new game, we’ll see that trend continue.

skylanders-swap-3GamesBeat: What about the spread between the people who buy a few and the people who have to collect ‘em all?

Coyne: I’ve worked on a lot of toy franchises, collectible franchises. You’re always going to have people that choose very carefully the characters they buy, and then you’re going to have some kids and gamers who want to get everything that they can. The game is equally enjoyable either way. We always make sure that you can play through the game with the starter pack toys.

Taub: The last piece on the expanding demographic is that they’re seeing that we’re not setting out to make a game that is just a kids’ game. It’s a triple-A game in every way, from graphical fidelity to development time to the studios that are involved. It’s a meaningful gaming experience. While kids may be the place where it started, you’re starting to see an appreciation for the quality of gameplay and the replayability and the enjoyment factor.

Coyne: That’s also true when you see families play together. It’s the type of game where dads and moms enjoy playing with their sons and daughters. It’s an easy game to enjoy.

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