Beyond Toys and Games: How Character Licensors Are Expanding Into New Categories

In April 2024, Mattel partnered with Heinz to release a pink “Barbiecue” sauce. Although Barbie dolls and condiments may not seem like an obvious pairing, character licensors are moving into unexpected product categories through increasingly inventive brand collaborations.

Brand partnerships are not new, but they are certainly becoming more creative. The year 2024 has seen an influx of surprising co-branded merchandise, from Shrek and Lush bath products to Fendi’s luxury apparel with Pokémon and FRGMT. These novel pairings are becoming more common, prompting an exploration of how character brands are expanding into consumer categories. Are the possibilities truly limitless?

How do characters connect with followers? Toys and gaming remain front and center.

Character brands have historically dominated the 340 billion dollar licensing market with a strong focus on toys and games. Licensors such as Hasbro and Mattel have expanded their influence through storytelling and content creation. The Barbie film, produced with Warner Bros., grossed more than 1.4 billion dollars and demonstrated the cultural power of these brands. Gaming franchises have also gained mainstream appeal, with titles such as The Witcher and Super Mario Bros. successfully transferring to television and film.

Character licensing has a 41% market share, with toys, gaming, and media key product categories.

However, character licensors are now moving into new product areas through brand collaborations. What is driving this shift?

Character licensing holds a 41 percent market share, with toys, gaming, and media as core product categories.

How are licensors broadening their appeal? Moving into consumer categories.

The expansion into consumer categories is illustrated by Mattel’s partnerships with more than 165 brands before the release of the Barbie film. A wide range of co-branded merchandise hit the market, including Barbie Crocs footwear and Di Martino Barbie pasta. Why the surge in collaborations?

By partnering with consumer brands, character licensors can connect with their followers in new and unexpected ways. Often, the more surprising the pairing, the more attention it attracts. Novel collaborations help brands stand out in a crowded marketplace and increase their cultural relevance.

By moving beyond toys and gaming, character licensors can also reach a broader audience. Much of the new merchandise targets adults, from Disney-inspired bridal gowns to Christian Cowan and Teletubbies fashion collections. Although collaborations offer room for expansion, licensors also face challenges when entering unfamiliar product areas. They must manage increasingly complex programs and maintain consistency across multiple categories. New markets such as location-based entertainment add further complexity.

The location-based entertainment market is valued at over $3 billion, and rapidly growing.

Where are character brands going next? The rise of location-based entertainment.

In recent years, there has been a significant rise in theme parks and attractions dedicated to character properties. Super Nintendo World and Toy Story Land are major examples. Even heritage brands are moving into location-based entertainment, shown by the opening of the Paddington Bear Experience in 2024. This market saw explosive growth, with a 67 percent increase in 2022.

Why the dramatic rise? Immersive attractions allow followers to experience their favorite characters in a physical environment. They also create new opportunities to promote merchandise at a moment when the brand is top of mind.

Location-based entertainment goes beyond theme parks. In 2024, several art exhibitions were dedicated to popular character properties, including Pokémon and the Care Bears. The Peninsula London Hotel even launched a Peter Rabbit-themed afternoon tea. Although the growth potential is significant, entering any new market requires navigating unfamiliar partnerships and business models that extend beyond physical merchandise.

The location-based entertainment market is valued at more than 3 billion dollars and continues to grow rapidly.

Character licensing programs are vast, with Funko managing over 1,100 licenses alone.

How can growing brands cope with rising complexity? Understanding the challenge.

As licensors pursue new categories and multiple partnerships, complexity increases. Expanding into new markets makes licensing programs more difficult to manage. Maintaining a consistent brand identity across diverse product categories is challenging, especially in unfamiliar areas.

Co-branded merchandise must be carefully designed to reflect both partners’ values, particularly when products target younger audiences. Mismatched brand values can undermine collaborations, as shown by the Lego and Shell partnership, which faced significant public criticism. Additionally, some collaborations simply miss the mark according to consumers, such as the Barbie menu items launched by Burger King.

Beyond commercial risks, licensors must also remain vigilant about illegitimate threats. Expanding into multiple categories increases exposure to counterfeit activity and unauthorized selling. Even in location-based entertainment, trademark infringement can cause reputational damage. A notable example is The Willy Wonka Experience in the United Kingdom, which went viral for negative reasons and had no affiliation with the official franchise.

Character licensing programs can be enormous in scale. Funko, for example, manages more than 1,100 licenses.

How can character brands stay in control as they expand? Back to basics.

To manage complex and fast-growing licensing programs, licensing software is essential. These platforms streamline workflows across the entire licensing lifecycle and provide complete visibility into partners, proposals, and approved products. Many platforms include tools to review product artwork, helping licensors maintain control over how their brand is portrayed across different categories.

Brand enhancement strategies can also strengthen consistency. Premium merchandising components help unify products and reinforce a cohesive identity across categories.

Finally, brand protection is critical for safeguarding valuable character properties. Customized hangtags and packaging can incorporate security features that help consumers and brand inspectors identify counterfeit products. Online brand protection technology also helps enforce against unauthorized selling, counterfeit listings, and trademark abuse.

From character to consumer, Crane Authentication empowers the industry.

Crane Authentication provides these solutions for many of the world’s most beloved character and consumer brands. In one recent project, we built a comprehensive licensing solution for a global character brand. Using Crane Authentication licensing software, the brand can review product artwork, marketing imagery, and video content. We also developed a hologram for every piece of licensed merchandise, incorporating optical security features and QR codes for consumer engagement. In addition, we created premium merchandising components that strengthen brand consistency across multiple categories.

Our customer uses these solutions to streamline licensing workflows while ensuring the integrity and impact of their licensed merchandise.

Ready to elevate your brand’s potential? Contact Crane Authentication to discover how our licensing solutions support the world’s most iconic character properties.