When Bonnie Ross became Microsoft's head of all things Halo nine years agone, she wasn't just thinking most video games.

Ross wanted Halo to suffer over decades, and then she studied other entertainment franchises with a geeky aptitude—Batman, Pokémon, Lord of the Rings, Harry Potter, and above all, Star Wars—to understand how they achieved longevity. The common thread was that they all became less dependent on their cadre medium for revenue.

"A lot of their initial businesses, what was the core business at the outset, changed to a different business organisation," Ross says. "And a lot of it was consumer products."

"Consumer products," in this case, is business organisation jargon for everything in the Halo universe besides the wildly popular video games. It includes toys, T-shirts, novels, comics, full-scale replicas, and—for lack of a better term—tchotchkes. Ross, a corporate vice president at Microsoft and the leader of Halo programmer 343 Industries, oversees both the gaming and not-gaming sides of the business, which operate out of the same studio in Redmond, Washington.

Bonnie Ross

In recent years, the earnings disparity between those two sides has shrunk. Since the starting time Halo game launched in 2001, the franchise has brought in $five billion. Roughly 30% of that revenue, or $1.5 billion, has come from consumer products.

In an interview, Ross says the studio has looked at how to turn the non-gaming side of Halo into the larger piece of the pie.

"Equally we launch a game, and our game is doing well, our consumer products business rides on that coattail, so we're not at the point where our consumer products business is leading our business," Ross says. "But if yous look at some of the biggest franchises, consumer products are where they get the lion'south share of the money."

Merchandising, Merchandising

The idea of blockbuster entertainment franchises making about of their money on licensed products is hardly new. Final twelvemonth, Fortune estimated that the Star Wars films—including home and box office sales—simply deemed for about $xiii.05 billion of the franchise's $41.98 billion lifetime earnings. Merchandising alone has been a bigger moneymaker than the movies, bringing in $17 billion in 1977. (Mel Brooks was correct all forth.)

Only while media giants similar Disney have demonstrated how to turn movies and comic books into merchandising powerhouses, no such blueprint exists in the gaming earth. Nintendo has one of gaming's nearly recognizable faces in Mario, yet only 1% of the company'southward 2015 revenue came from licensing, Reuters reports. Rovio Amusement's Aroused Birds is notorious for its overabundance of licensed appurtenances, but even during its heyday iv years ago, near of the coin came from games. (The Angry Birds movie may tip the scales, but only because Rovio's revenue has cratered in contempo years.)

Ross envisions Halo condign more like those blockbuster moving picture franchises. Even if gaming is the core business, consumer products are a broader sign of franchise forcefulness, helping to fuel a rabid fan base of operations in between major releases. In the past, she'southward compared Halo to Star Wars, and doesn't shy from that comparison now.

"When I look at having Star Wars as an aspirational target, it's how we all felt the kickoff time nosotros saw that Star Wars movie, and how that universe, and any story you want to tell in that universe, is worth listening to," Ross says.

In essence, consumer products aren't just virtually making money. They're about making sure people never end thinking near Halo, even when in that location's no new game to play.

[Photo: Flickr user Justin McBride]

Crossing Over

Go on in listen that in the broader entertainment earth, Halo'southward $1.5 billion lifetime consumer product revenue barely registers as a blip, says Lutz Muller, a toy industry practiced who runs a consulting business firm, Klosters Trading Corporation. In License Global's list of the acme 150 licensors, which collectively reported $262.9 billion in revenue last yr, Microsoft doesn't even bear witness up. (Microsoft counters that information technology chooses not to written report revenues to this list, but if it did, Halo earnings alone would hands brand the cut.)

"If you await at what Halo is doing, Microsoft, any they tell you, are not a factor in licensing trade, period. End of story," Muller says.

That's largely because of the toy business, which makes upward 31% of all entertainment licensing revenue—larger than any other segment. Although Mattel has been putting out Halo-themed Mega Bloks and BoomCo toy guns, neither are peak sellers for Mattel, and both toy lines are much smaller businesses than rivals LEGO and Nerf, according to Muller. Mattel is now condign a bigger partner, with Halo activity figures, remote control vehicles, and Hot Wheels coming this year and adjacent, but it'southward unclear how well they'll sell.

The problem, Muller says, comes downwards to demographics. The toy business organisation generally appeals to children between ages 2 and 10, while Halo is marketed to older teens and adults. Toy makers are more interested in pushing franchises with all-ages appeal, which explains why other game franchises, such as Destiny and Warcraft, aren't moving a lot of toys either.

"I can't tell you of one successful video game make that has fabricated the transition into toys," Muller says.

Ross argues that the audience for Halo's non-gaming business organization is starting to expand organically. Children who are a petty immature to exist shooting aliens in the face might still go a kick out of Halo Mega Bloks. Adults who don't savour virtual combat might still approach the series' infinite opera plot through comics or novels. Though she doesn't offer specifics, Ross says the company has data showing a certain level of cross-generational appeal.

"People that were playing the start Halo, they now have kids that they're bringing into the franchise, and that'south where nosotros come across our toy business," she says.

[Photo: Flickr user Justin McBride]

A Halo For Everyone

Fifty-fifty if Halo is carving out modest success in toys and other trade, it's unlikely that these products and their corresponding games will propel the franchise to become a massive multimedia one. To reach the next level, Halo volition need something new.

In Muller'due south view, this would likely have to be a movie with a major marketing push behind it, because that's what gets toy makers to activate their sales forces. "If they wanted to make it possible for toy companies and other license companies to go really interested in the brand and put some weight backside it, what I would suggest is, make a motion-picture show and make a successful one," Muller says.

Ross points out that Halo has already expanded beyond games to live-action web video serial, books, and comics. There'southward also a Halo Television receiver serial for Showtime in the works, with Steven Spielberg producing. Merely she rejects the idea that Halo must commit itself to a blockbuster movie or de-emphasize gaming.

"Games will ever be the cadre business for Halo," she says. "It'southward what we've built the brand around, and the lifeblood that connects the various pieces of the franchise."

To that end, Ross doesn't outright dismiss the idea of new Halo games for a wider audition. While she is very careful to annotation that 343 Industries doesn't accept any plans on that forepart, she says the studio is watching the younger demographic and figuring out how to balance their interests against those of cadre fans.

"Whether or non we do a game, I remember we need to be really deliberate on the correct game, because we can't alienate our core audience," Ross says. "I would say that when we first started the franchise, the thought of doing, similar, a LEGO Halo game was not something that our core fans thought was interesting, whereas now we're getting requests for that."

Appealing To The Base

If y'all're a diehard Halo fan, this talk of more merchandising and new audiences might make y'all squeamish. There'due south certainly a faction of Star Wars fans who feel the films have been ruined past merchandising, and flick buffs who believe the Star Wars concern model has ruined cinema.

Ross—herself a huge Star Wars fan—is aware of the potential pitfalls.

"When you look at how the overall [Star Wars] portfolio is managed, in that location is a lot, a lot of stuff out there. And not all of it is on canon," Ross says. "Information technology'due south been very of import for us to have a more than curated, connected story."

She admits that 343 Industries can go carried abroad in this regard. In recent years, the Halo games have become overwrought with storylines, and an expectation that players accept studied the lore from the expanded universe. At some point, the series' purity of gameplay, backed by elementary but cohesive plot lines, got lost.

"The learning nosotros're looking at right now is, How do we be a trivial fleck more purist about the stories we tell in our games, and how do we make certain that we apply our consumer products and all our novels and everything to tell the richer, deeper story?" Ross says. "Fans have definitely given the states the feedback that we've had a trivial chip likewise much story out there."

On the whole, though, Ross suggests that Halo's ambitions are resulting in improve games for the cadre audience. She describes how Greg Bear, the author of a trilogy of Halo novels, visited 343 Industries to describe his vision for the Forerunner characters that appeared in future games. And with Halo five, the game designers were thinking most how their vehicle and weapon designs might look every bit toys. One might view the latter example with cynicism—some other sign that merchandising is poisoning artwork—simply Ross sees it as a fashion to prod Halo's designers into thinking differently.

"When yous look at something like Star Wars, or others, you lot do desire to re-enact your own stories if yous're a child. You practice await at LEGOs, you do wait at action figures when you tell your own stories," Ross says. "And it really makes our team think more broadly as they design, which I retrieve is adept."

Halo is trying to strike a tough balance. Ross wants the franchise to aggrandize its horizons so that information technology might be cherished by a wider audience. But for a video game whose roots are in vehement simulated combat, there's no easy, proven fashion to do that. Ross and 343 Industries are in the difficult position of trying to continue fans happy—the importance of which she stresses multiple times throughout our interview—while charting entirely new territory.

"The critical piece there is to never amerce the torch bearer. And the torch bearer, if yous expect at Marvel or whatsoever, is the kid that was so into that comic volume grapheme before that comic volume character e'er came to the masses," she says. "How practise you give a nod to him or her every bit you augment the franchise? Y'all have to exist really careful, because if you lot amerce the torch bearer, yous lose what the Dna is of your franchise."