Last week Activision announced its next title in the Skylanders franchise. Titled SWAP Force, the newest adventure for the Skylanders allows for players to customize and create all-new characters with different abilities based on the combinations gamers make.
The Post Game Report was able to catch up with Activision Publishing CEO Eric Hirshberg and get his thoughts on the SWAP Force announcement, the state of the Skylanders franchise and industry competitors.
PGR: They say imitation is the most sincere form of flattery so I’m going to start off by asking you what your thoughts on the Disney Infinity project are and how it relates to the Skylanders concept that you guys pioneered.
Hirshberg: I like the way you asked the question. I’ll say this, if imitation is the highest form of flattery, we’re feeling very flattered. What I will also say is, and we’ve been very consistent on this when asked similar questions about franchises, is that you don’t win races by looking over your shoulder. We are laser-focused on our creations, our products and making sure that they are breakthrough and as good as they can be and that’s been a good formula for us in the past and that’s what will allow Skylanders to continue to be the leader in this category which we created.
The competition is nothing new for us. Obviously we’ve had a lot of success with Skylanders and with the toys to life category that we’ve brought to the industry so we knew it was only a matter of time until there were followers and that’s to be expected. What we are focused on is delivering magic and creative breakthroughs every time and not resting on our laurels. That’s why I think the timing of the SWAP Force release was fortuitous because we’re not just bringing toys to life again, but we’re doing it in a new way where you get to customize your characters in the real world, keep them in the digital world and we’re also adding a new playing mechanic and pushing the medium forward. That’s the bar we set for ourselves, it is what our players have come to expect from us and what will allow us to continue to succeed.
PGR: Looking back over the past couple of years with the Skylanders franchise, which has become wildly popular, what do you feel about it? Did you guys expect to be making a third title in what has become an over-arching phenomenon?
Hirshberg: It feels great on a number of levels because it was something that we all believed in. When you’re proven right and encounter that kind of enthusiasm from the marketplace, it’s very rare and very gratifying. Did we expect it? Yes, because we invested big behind it, but it has exceeded even our very optimistic expectations. The thing that when you actually step back and look at the actual franchise and how we feel about it here, is that I remember not very long ago answering a lot of skeptical questions about why are you moving into the toy category when the toy category is struggling or why are you getting into kids games at the moment when the Wii is at the end of its life cycle and other publishers are getting out of it or why are you trying to develop your own IP?
In all of those cases, we felt like what we had going for us that no one else could see was that we were able to see how kids were responding to this because we were already doing testing and that this thing was lighting kids’ eyes up in a way that we haven’t seen very many times in our careers. That’s what made us bullish. I think in business, it’s easy to start aiming at other bull’s eyes other than the consumer. You can always take your eye off that ball and look at other things because there are so many distractions, so many ways to think about success and what we said “the gamer is going to make this a winner” because our target audience loved it and responded to it and that’s what fueled our confidence.
Another thing I feel very good about is the question about launching an all-new toy line. I think embedded in that question is a sort of underestimation of video games as a medium that is capable of launching its own mythology, its own characters and its own world. People still think that’s what movies, television shows and novels do, but video games are too and there is a lot of evidence of that in culture. Some of the most beloved characters, worlds and franchises were born in video games. I always felt like that was an underestimation because games are a great place to launch a new franchise or characters. As someone who is in the games industry, I don’t think it’s just a great thing for Skylanders, but it’s also a great thing for games and the industry.
PGR: Is it kind of a big “we told you so” because of the success you have had with Skylanders?
Hirshberg: Absolutely, it is very satisfying [to see the success of Skylanders]. A lot of the critics of the game space talk about the absence of innovation. If you look at the games industry and you look at the top 10 games, all 10 year after year are sequels. The same thing is true in the movie industry and with books, we live in a franchise-driven world. It’s a very hard pattern to break and I think maybe the most gratifying thing is knowing that a breakthrough idea, if it’s novel enough and magical enough, can pierce that armor. The year that Skylanders launched, it was the only game in the top 10 [sales-wise] that wasn’t a sequel. It shows that a breakthrough idea still has enough power to break the franchise madness that we live in.
PGR: Not to focus on a negative or potential pitfall, but do you think the company has learned from the hardware-based gaming that came with Guitar Hero, which was huge a few years ago, releasing year-after-year but the market quickly became saturated and it tanked quickly. Do you think Skylanders is immune to that kind of collapse or is it a concern of yours?
Hirshberg: It’s a fair question, but I think there are a couple of key differences that I want to point out, but there have been a few key pieces of learning that I will acknowledge. The differences are that I think if you look back at Guitar Hero, it didn’t just introduce a new play mechanic, but it brought new players in, people who were visitors to the gaming space and weren’t gamers before that and came to it for this one novelty. The difference between that business model and what we’re doing with Skylanders is that we’re building on two very stable markets. The market for toys, kids have been playing with toys for longer than games existed. The demand for toys isn’t going anywhere. Skylanders is also a video game for people who like video games. It is a gamer’s game.
I also think that we’ve gotten the cadence right. We’re bringing out new characters, but we’re only releasing one game a year now and we’ve seemed to have gotten into a good cadence with our audience in the sense that we’re still not keeping up with their demand and thirst. As part of our SWAP Force announcement in Times Square, we announced a day earlier that we would be giving a look at the newest Giant, Ninjini, and there were 500 kids lined up outside Toys ‘R’ Us. It looked like an iPhone launch, just with kids. That level of enthusiasm is heartening to see.
The learning part, and this is where I want to acknowledge that I think we’re getting it more right than we did with Guitar Hero, I think there wasn’t the kind of meaningful innovations each year. There were the addition of singing and drums and new guitar design, but it was the same mechanic from game to game. What we’re holding ourselves to at Skylanders is each time we come out we want to bring new, meaningful, wow, magic moments that weren’t in the franchise before.
SWAP Force is a great example of that. It’s still true to everything that people have fallen in love with but now you get to customize the toys in the physical world and have the digital world recognize. That’s adding yet another new play mechanic, it’s not just the same game with new characters.
PGR: How do you view SWAP Force as a driving factor in your sales for later this year? Nothing has been officially said about Call of Duty, but it’s a staple as a yearly franchise, but where does Skylanders fit into that picture?
Hirshberg: We just had our earnings call yesterday and we’re definitely expecting continued success with Skylanders. As a company we have a focus on doing a few things exceptionally well and make sure we’re not spreading too many chips on the table and fractioning our effort, but rather placing big bets on things that we think have the most creativity and commercial value, so with Skylanders what that means we have to put the manpower, creativity, capital and investment behind it that allows it to continue to deliver breakthrough innovations. If we do that, I think we’ll continue to be successful.
PGR: Treat me like I’m a mother with a child who is begging me for more Skylanders and wants me to wait on line for SWAP Force and new characters. Why am I doing that? Why don’t I just say, here’s the game, go play with your old characters. What is the draw?
Hirshberg: That’s a great question and one of the decisions that we made early on and I think has been proven wise is that we made the characters forward-compatible. It adds tremendous value to your collection and I think it drives a lot of good will with consumers. The fact that you made a $7.99 investment two years ago and that toy is still adding value and is a current, live thing in your play is really cool. That said, you do have to ask if that will lessen the demand for the new toy and I hate to sound like a broken record but it comes down to the innovation and magic we can brew into the new product.
For the parents, the answer would be, show me a better value anywhere in the toy store. You can buy a Skylander for the same price as any toy in the store and that doesn’t come to life in a video game. For that money I think you get more play time and value than any other toy in the store right now. Also the creativity that SWAP Force involves and invokes is great. I am a father and I have two kids in the age group for Skylanders fans and when I look at how Skylanders drives imaginative play, it’s not like other video games. Because of the connection between the physical and digital world, kids are constantly coming up with new ways to play and interact with the characters. I think that video games are unavoidable in our culture right now, they are a fascination of a generation for sure and this provides so much interactivity and creativity that as a parent, I feel really good about it.
Think about the fact that when you buy two toys, you actually get four with SWAP Force. The fact that you can make these different combinations and that they actually have different powers, names and personalities when you combine them is really pretty cool. If you bought Washbuckler and Blastzone, you not only get those two but you also get Blastbuckler and Washzone and they are really different. That sort of exponential creativity and customization, as a gamer I get really turned on by it and it’s really fun.