Does Amazon’s launch of an on-demand merchandise service for gaming companies represent good or bad news for established garment decorators? Images talks to some game publishers to get their view of the new service
Launched in September last year, Merch by Amazon heralded the online retailer’s entry into the print-on-demand market. Currently only available for promotion in the US (it will, however, ship worldwide), this new service allows gaming companies to promote their own branded T-shirts both in-app (while customers are playing the game) and on an Amazon.com page. The appeal to the gaming companies is that they can simply create a T-shirt on their Merch by Amazon dashboard, set the price, create an account for receiving royalty payments from Amazon and then use the Amazon Mobile Ads API (application program interface) to set up the in-app promotion.
When a customer buys a T-shirt, Merch by Amazon processes the order, prints the T-shirts and sends them out. The gaming company then receives a royalty; on the example give by Amazon, the royalty for a one-sided Anvil T-shirt sold at $19.99 would incur a $3.00 listing fee and $9.31 for Amazon’s cost, resulting in a royalty payment of $7.68. Which, from a gaming company’s point of view, is an exceedingly nice return simply for creating a T-shirt design from artwork already developed for its game and promoting it to an audience in an app that it owns. And for Amazon, with the global gaming industry estimated to be worth $113 billion by 2018, it’s an appealing market to tap into.
The landing page on Merch by Amazon’s website currently says it is available by invitation only. One of those who did receive an invitation is Luke Didd, general manager of Village Life, a popular game from Playdemic that has close to 1 million active users each month. Selling merchandise was not something Playdemic had thought of doing before Luke’s account manager at Amazon suggested it. “The reason we did it was because the Merch opportunity was there and available, and was really straightforward and seamless for us,” explains Luke. He adds that it’s only when games become as big as Candy Crush or Minecraft that a game company would normally start to think about merchandise, which suggests that Amazon could be creating a market that didn’t exist before.
Despite testing the designs on selected players before launching in November – the response was positive – when it came to the next stage of the launch, where the $19.99 T-shirts and the links to the Amazon. com pages were introduced to some Village Life community groups that have about 15-20,000 players, there was, surprisingly, little interest, reports Luke. Playdemic decided before Christmas to hold off from promoting the merchandise service further as it had a number of other updates about the game to communicate to players, and so far Luke believes it hasn’t sold any T-shirts. Nor do there appear to be any impressions on the Amazon.com pages for the T-shirts for between 1 December 2015 and 1 January 2016. However, Luke says this might just be due to the tools not working properly yet. Irrespective of this, he says Playdemic is still interested in Merch, but points out that for it to work for its globally played game, the service needs to be rolled out worldwide.
Game publisher Jagex, the large UK studio behind the online fantasy game RuneScape, opened a RuneScape merchandise website in April last year, where it releases new products based on community feedback and suggestions. BSI Merch handles all the products for the website after it produced the merchandise for the RuneScape’s annual fan convention, explains Jagex’s channel strategy manager Luiz Barbosa: “Due to their excellent support and great fan feedback, we decided to opt for them to run our merchandise store. The most important factor was having a good balance between great product quality and an affordable price tag for the customer.” Despite this good relationship, Luiz admits that he would consider Merch by Amazon if it expanded into the UK and the rest of Europe. “Merch by Amazon certainly provides an easy and no risk solution to game developers. It appears to give studios like us a lot of flexibility to add new items on the fly,” says Luiz. “The biggest advantage, in my opinion, is the ability to utilise the excellent infrastructure and established user base. For these reasons, I would consider using their service as an experiment, especially to increase accessibility.”
The service is currently only available in the US although it’s hard to believe the company won’t roll it out worldwide at some point, given the global appeal of games (and T-shirts). For now, Amazon is remaining tight-lipped about any plans for a roll-out to other countries. Lyn Hart, owner of Merch by Amazon PR, comments: “We haven’t made any announcements about expansion, so I’ll have to ask you to stay tuned.” Nevertheless, the scale of the company’s print-on-demand ambitions became evident in January of this year when Kornit announced that it had shipped multiple Avalanche 1000 systems to Amazon’s Texas-based facility during 2015 with plans to build more Avalanches to “handle the growing production needs of Merch by Amazon”.
So what does Amazon’s entry into the print-on-demand business mean for established garment decoration businesses: is the company establishing a new market for decorated garments (and would its success boost the profile of branded T-shirts generally), or is it threatening to take work from existing businesses: and will its service stop at gaming merchandise or expand into other areas of apparel embellishment? Only time will tell: at the moment Amazon appears to be building a market rather than taking business from others, although whether it will limit itself to game companies’ merchandise or expand into the wider online merchandise markets remains to be seen.