Soul and Vibe Interactive, Inc. (SOUL) Parallels Movie Industry with Creative Monetization

When the motion picture industry was still young, revenue was based upon one source, the money paid by the movie goer to see a movie. As the industry developed, however, companies like Disney began to realize the income potential from character development and corresponding licensing. Disney currently pulls in close to $30 billion in licensed merchandise fees, far more than it does from movie sales or other sources, and is considered the world’s top licensor. Today, the same type of ancillary monetization is being applied in the video gaming industry, though in somewhat different ways.

Soul and Vibe Interactive, a publisher of games and games-related content for consoles, mobile devices, and personal computers, specializing in the creation of original intellectual properties, is a good example. The company’s business model calls for numerous revenue streams to be generated from each game release, and the Minnesota-based company is continuing to develop revenue streams separate from the purchase of games. In particular, each game product will be supported by a recurring release of monetized games-related content. Ancillary revenue is to be generated from the sale of Premium Downloadable Content (“PDLC”), virtual apparel and costumes for Avatars, and monetized “Consumables.” Their mobile games are also designed to be revenue generating marketing vehicles for their console releases.

In addition, the company’s digitally-oriented distribution and marketing model provides additional licensing control. “IP” ownership allows Soul to control the licensing of their properties to 3rd Party merchandising companies, and to retain the majority of revenues, maximizing shareholder value. The video and computer games industry has historically distributed and marketed physical media through traditional retail channels. The digital distribution and marketing of content is relatively new, but Soul was founded with a business model that fully embraces digital distribution. It’s an approach that can be focused on the end consumer, avoiding the challenges and costs associated with physical media distribution.

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