I’m not sure if you needed another sign, but here’s another indication the gaming ecosystem in Helsinki is developing. A team of three former Rovio employees have now officially launched 5th Wave Brands, a licensing consulting company to help gaming companies find the same type of revenue streams and branding opportunities that Angry Birds has been able to hit by getting their brand into real-world merchandise. It can turn into a serious amount of cash – in their last posted revenues, liscensing accounted for near 40% of Rovio’s revenues.
But speaking with the founders of 5th Wave, its not just about plugging into a little extra money, instead they see a booming market opportunity by plugging into the next wave of branding and licensing: mobile entertainment.
”The mobile entertainment revolution is just in the beginning, and it will fundamentally change the way people consume entertainment. Mobile brands can instantly gain fans all over the world, which enables huge global licensing opportunities,” says Heikki Laaninen, Managing Director of 5th Wave Brands.
The team isn’t only positioned at the right time, but according to them they’re also in the in the right place. Co-founder Khalid Bur says they see value in being located in Helsinki, which is fast becoming the world’s mobile gaming hotspot. “We know developers, and we speak the same [gaming] language,” adds Laaninen.
The way their model works is that they work somewhat like an outsourced version of a company’s branding and liscensing division. Rather than growing everything up from scratch in-house, they take a percentage of revenues, costing the game developers really not much more than time.
At launch they’ve already signed Badland, the Apple Design Award winning game by Frogmind, Hill Climb Racing, the most downloaded racing game ever by Fingersoft, and Ruzzle, the casual word game by MAG interactive that just raised $6 million.
It will be interesting to see how 5th Wave will be able to extend the brands of the companies they’re working with. Angry Birds has somewhat flat in-game characters, but they’re cute enough to move some stuffed animals, t-shirts, and even coffee. Badland is uniquely brandable, but I’m curious how they’ll move some merchandise with a word puzzle game, or the somewhat basic visuals of Hill Climb Racing. Bringing up these challenges they seem unmoved, but can’t comment on the liscensing plans they have in place, other than saying the download numbers speak for themselves, and that there are really unique things they can do in each category.
“If gaming companies don’t have any proprietary technology, then they’re looking for something to extend their value. With liscensing they can do that because games come and go, but brands have much more lifetime value,” says Mari Turhanen, cofounder of 5th Wave Brands.
5th Wave Brands has raised an undisclosed amount of seed funding, and is interested in growing the business further by eyeing global markets.
