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2 Giants Join Forces: Funko Announces Partnership With Epic Games

2 Giants Join Forces: Funko Announces Partnership With Epic Games

From clothing to books to themed weddings, video game merchandising has become an overwhelming presence in today’s entertainment industry. Pop culture company Funko, Inc. (NASDAQ: FNKO) is among the leading retailers for these novelty products.

Especially after this week.

What Happened

Funko released a statement Wednesday announcing a partnership with Epic Games. Through this collaboration, "Fortnite" characters will be brought to life through an assortment of toys and collectibles.

The "Fortnite" collection will feature at least 10 diverse product lines, such as Funko’s iconic Pop! figures, 5 Star figures, Pint Size Heroes, Vynl, keychains, POP! apparel and more, according to the toymaker. 

Considering the following of these brands, both parties are optimistic about the collaboration.

"Ultimately our goal is to create a powerful merchandise strategy for the 'Fortnite' brand, as well as bring these amazing collectibles to fans around the world,” Funko CEO Brian Mariotti said in a statement. 

Epic Games Vice President Mark Rein said the company is "thrilled" to partner with Funko. 

"We hope our players are as excited as we are about all of the cool stuff that's on its way."

Why It’s Important

Since its release in 2017, a reported 40 million users log in to play Fortnite every month. Because the game is still free to download on every available platform, unlike its competitor, users have the opportunity to try the battle royale gaming style without breaking the bank. The money saved on the game itself could directly translate to more money spent on this particular merchandise.

Funko stock jumped 9 percent after news of this deal broke. PiperJaffray analyst Erinn Murphy commented on the partnership in a Wednesday note. Funko's recent focus on both 'Pokemon' and 'Fortnite' will likely drive the company's growth and popularity, Murphy said. (See the analyst's track record here.) 

"Importantly, the audience for both licenses is broad in nature, with Activision Blizzard, Inc. (NASDAQ: ATVI) noting 'Fortnite' 'is attracting new players of all ages and gender and it is helping gaming become even more mainstream entertainment.'" 

The brands hold "strong commercial opportunities with limited cannibalization impact," Murphy said, and demonstrate Funko's ability to rapidly market and monetize pop culture. 

What’s Next

Funko plans to launch these products in time for this holiday season. The collectibles will be available worldwide.

Related Links:

Morgan Stanley: 'Fortnite' Phenomenon A Tailwind For Apple's App Store

Party City Pop-Up Toy Stores Could Help Toymakers Stung By Toys 'R' Us Closures

Screenshot courtesy of Epic Games. 

Latest Ratings for FNKO

Nov 2019MaintainsOverweight
Nov 2019MaintainsMarket Perform
Nov 2019MaintainsBuy

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