Licensing is a big, big business, one that began – as we today understand the term “licensing” – in the 1970s, with George Lucas’s blockbuster Star Wars. Not only was this one of the early summer smash-hit movies which helped change the pattern of film distribution, it was the first time there had been a multitude of tie-ins – lunchboxes, video games, clothes, records. You name it, you could buy it with the Star Wars brand on it.

And licensing has since grown to be a large part of the business model for films as a direct result of this early success, with the fourth Star Wars movie The Phantom Menace reportedly making a profit before it was even released, thanks to licensing deals.

So it’s big business, but it’s also a risky business for amusement manufacturers. Securing the right licence for a slot machine, SWP, or kiddie ride can be incredibly expensive and that expense may be carried down to the site operator, robbing them of the increased profits that a licence theoretically brings.

So is licensed product – in any aspect of the amusement and gaming trade – really worth it? Or can a generic product operate just as well if the right product is in the right location?

Wendy Townsend, head of operations at Northern Leisure Group (which trades as Kiddy Rides), doesn’t think licensing is all it’s cracked up to be – mainly because there are so few A-list licences in her market.

“I don’t think that licences are the be-all and end-all – but a good licence is worth its weight in gold,” Townsend told Euroslot. “We’ve got Peppa Pig and it’s been absolutely phenomenal. They’re few and far between, though, despite there being hundreds of different licensed products out there, with rides and everything else. But with kiddie rides I would say Postman Pat started as the big licence back in the early 1990s, and then there were lots of other licences, but none anywhere near as big.

“Then there was Bob the Builder, which was phenomenal, but now there are lots of smaller licences that don’t hit the same revenue peaks that those two hit. Peppa Pig seems to be the next one, with good sales in machines and in income stream. Though there are lots of licences, there are very few blockbusters.”

Teen idols

Perhaps the saturation of all levels of life with licensed product has left customers a little jaded – but perhaps it also depends on your customer demographic.

It almost goes without saying that teens are conspicuously brand-conscious, so given a choice between an official X Factor product and a loose imitation that does the same job, X Factor will win every time – and it will grab their attention more forcefully in the first place. An older demographic might find the lure of the Bullseye quiz machine impossible to resist, while a teenager may not even recognise the brand.

The heightened recognition of brands is the driving factor behind the success of licensed product. After all, that’s why Starbucks and McDonald’s proliferate worldwide; people want familiarity, and that’s what a licence brings.

For example, in the June 2011 Independent Operators Association (IOA) income chart for pub gaming machines in the UK, Bell-Fruit had four entries that are variations on a single licence: Deal or No Deal. This title, recognised worldwide, has also scored significant success in casinos, with Atronic’s selection of games installed in North America, Macau and Europe – thanks to the TV show’s regional variants, it’s been a hit just about everywhere.

In the SWP market, the accepted wisdom is that while a licence might not make a game a must-play, it can’t hurt its chances. But unlike the casino industry, which might gamble on The Hangover, The Dark Knight, or American Idol for its hit licence, SWPs can also find a niche with personality licences, like FatSpanner’s Russell Grant game.

FatSpanner’s Paul Slavin explains: “A game we did a short while ago featured astrologer Russell Grant; people thought we were mad to do that. We had identified a gap in the market, with a female demographic that wanted to play a skill-based game. The opportunity arose for someone people recognised and who appealed to that demographic, and Russell fitted the demographic we wanted to target. It would appear to be a completely bizarre licence to attach to a game but it was for a specific reason.”

Indeed, FatSpanner is taking licensing to the next level, with machines and licences created to target very specific demographics. A good early example is its quiz cabinet Jimmy White’s Whirlwind Snooker, launched with a run of 147 limited-edition cabinets, each arriving at venues with a signed certificate from White and the chance to win a signed cue.

Snooker halls have snapped up the cabinet, and it’s helped FatSpanner discover potential new revenue streams. Says Slavin: “We’re now looking at ranges of quiz machines that are more specific and aimed at specific places, using the brands not just for the games but also for the actual cabinet.”

Choosing your licensed product is as simple as seeing what sells on the high street and seeing what people watch on TV. And many exploiters of licences have, instead of trying to predict what will become the next big thing on TV or in the movies, gone backwards; slot manufacturers in the casino industry recently launched Dirty Dancing, while Grease and Jaws have also performed well.

These licences have a timeless quality and won’t date as such – and it may help that two of them are set in the past, so their antiquity is part of the charm. There’s even a Coronation Street 50th-anniversary gaming machine about to hit Britain’s pubs, and this may be the cutest licence of the lot, as the soap has trans-generational and cross-gender appeal, plus brand recognition almost unparalleled in entertainment.

From small screen to big

In recent years, licences have not just come to the world of gaming from films, TV and music – they have travelled in the other direction, too.

A big-name console game can nowadays have a larger budget than the typical feature film. Currently, the average movie budget is around $40m, while the investment to develop Grand Theft Auto: Liberty City Stories is reportedly $100m. It’s no wonder, then, that developers are keen to recoup this in much the same way as a blockbuster movie’s producer. One route is to license the property to other entertainment media.

The Gear of War console game franchise, for example, has had novels and comic books launched around it, and many games are now becoming movies, a reversal of the way things used to be, when a poor-quality game would be rushed out to accompany a film release. These days, a poor-quality film often follows an excellent game.

Amusement machines don’t, of course, have such huge budgets – or comparable revenues. But when a licensed property gains a high profile across multiple platforms, any amusement based on it is likely to benefit from a halo effect.

When stars go bad

One might think that a personality licences are risky propositions, not just for the manufacturers but for the venues installing the machines. What if the personality in question is caught with their pants down, or embroiled in a phone-hacking scandal? It’s not impossible – but as with most licences, a lot comes down to the target demographic.

For example, every time there is a major football tournament, some area of the media generally uncovers something unsavoury about a squad member, the manager, or both. Yet while this might provoke media frenzy, the average fan enjoys a beer and finds letting off steam more than forgivable, and little harm is done to the team or its sponsors.

Of course, if Cliff Richard turned out to be a cocaine-snorting devil worshipper, that might put fans off in a big way – but it would attract another kind of fan. There really is no such thing as bad publicity any more, just new target demographics.

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