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Journalists: Mind Candy has not made $250 million in revenue from merchandising

By on May 1, 2013

Mind Candy, the great British success story that makes Moshi Monsters, is 5 today. It is marvellous achievement by Michael Acton Smith, Davinia Knowles and the many talented people past and present who have contributed to its growth.

To mark that achievement, Mind Candy released an infographic with this key statistic

“$250 million total gross retail”

It’s a carefully phrased figure, but I have already seen journalists saying that Mind Candy has $250 million in revenues.

No. No. No. No. No.

Gross retail sales are not revenues

Mind Candy has form in this elegantly misleading approach. Back in November 2010, Mind Candy released a press release entitled “$100 million of merchandise predicted to be shifted next year”. Michael Acton Smith confirmed that in 2011, the company did indeed shift around $100 million in merchandise in 2011. I keep hearing people telling me that Mind Candy is making $100 million a year from merchandise alone.

In 2011, Mind Candy made £9.7m in licensing revenue. That’s around $15 million. That’s very good, but it is only 15% of the gross retail.

It’s not Mind Candy’s fault (much). The company is very careful to make clear that it is talking gross retail revenue, not revenue, income or licensing receipts. It is journalists who don’t understand numbers or people who don’t listen to what the numbers refer to to spread this misinformation.

Mind Candy’s accounts are available for a trivial fee from Companies House. The most recent accounts are for 2011. (The company has until September 2013 to file 2012 accounts, and I’m pretty sure it was late with the last set). Mind Candy made revenues of £28.9 million, of which £9.7 million come from licensing income. £15.4 million came from subscriptions and membership cards and £3.7 million came from a category called “Products” which includes the Moshling Zoo NDS game and the Moshi Magazine.

It looks as if Mind Candy is getting great licensing agreements with its partners. A 15% royalty rate is right at the top end. If I had to revert to my analyst ways and estimate how much revenue Mind Candy had made in its lifetime from merchandise, I would estimate $37.5 million.

So, journalists, here is how to put it: “Mind Candy has made $250 million in gross retail sales from its merchandise” or “Mind Candy has made an estimated $37.5 million in revenue from its licensing activities.”

Of course I could be way out. All analysts could be. But I am unlikely to be out by a factor of 7. Which is the error you are making if you call those $250 million in merchandising sales “revenues”

(And if you want to quote $37.5 million, feel free to credit Nicholas Lovell of GAMESbrief.)


You find the full size infographic at Mind Candy’s website.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: