Brand extensions are a marketing strategy. They allow companies to leverage existing brand awareness and equity to create more revenue streams.
Brand extensions strategies can take shape as one or more of the following:
- Line extension: Launching a new product line, or innovations to an existing product line, in a familiar category.
- Complementary product extension: Creating complimentary offerings related to an existing brand.
- Company authority extension: Creating new offerings based on existing industry authority.
- Brand lifestyle extension: Using strong association with a lifestyle/personality to extend into a new category or market.
- Customer base extension: Expanding a parent company’s customer base through the establishment of a new brand or brands.
To demonstrate the pros and cons of these strategies in gaming, let’s explore three examples.
Red Bull
Brand extension strategy: Lifestyle and complimentary product extensions
Pros: Inspires lower funnel actions
Cons: Requires long-term investment and brand equity in adjacent lifestyle interests
Red Bull is the largest energy drink brand in the world. The company positions itself as a lifestyle brand. One linked to extreme sports, adventure, and high energy. Red Bull’s iconic slogan, “Red Bull gives you wings,” appeals to consumers who crave excitement and an active lifestyle.
The Austria-based energy drink expanded its lifestyle brand into gaming starting in 2006. That year, Red Bull extended its athlete ambassador program to professional gamer David Walsh.
That move was, in fact, an extension of Red Bull’s support of athletes on the fringe of pop culture. Where the brand began sponsoring extreme sport athletes in the 1990’s.
Since then, Red Bull has also extended its branded events offerings into gaming. Today, the company’s annual esports events complement those in sports, music and entertainment.
Golden State Warriors
Brand extension strategy: Complimentary product and customer base extensions
Pros: Reduces reputation risks for parent brand
Cons: Requires investment in child brand, complicates long-term brand building
The Golden State Warriors are a successful National Basketball Association (NBA) franchise. The Warriors founded an affiliate esports organization called the Golden Guardians in November 2017.
The organization began competing in Riot Games’ League of Legends North American professional circuit in 2018.
The Guardians complimented their parent brand’s NBA product. The organization also served as a new brand that extended the Warriors fan (customer) base beyond traditional sports.
So, when the organization dismissed coach Choi “Locodoco” Yoon-seop for making an inappropriate comment towards a Riot Games esports personnel in February 2018.
The parent brand received very little negative blowback, even though ESPN reported the firing.
The brand extension strategy also opened the door to a quiet departure from esports. Reba Robinson, a former social media manager for the Guardians, first brought attention to the organization’s social media erasure in December 2023.
The only public message was a note on the Guardians’ website. It expressed thanks, “to our fans, players, and staff for their hard work over the last five years.”
The Guardians shutdown, nonetheless, erased all its brand equity in gaming. The Warriors will start from ground zero if they extend into gaming again, as a result.
Oakley
Brand extension strategy: Line and authority extensions
Pros: Taps into strategic partnerships
Cons: Requires product innovation
Oakley is widely known for its high-quality sunglasses that combine innovation and style. More specifically, customers recognize the Southern California-based company for its groundbreaking technologies. These include its Prizm lenses that enhance colors and contrasts.
Oakley also released a gaming collection in November 2023. The collection is a line extension consisting of two different designs. It is based on a partnership with Epic Games’ Fortnite game title.
The extension also tapped gaming creator Maria “Chica” Lopez. Chica is the first Latina LBGTQ+ creator to join Fortnite’s Icon Series.
One design is the Helux Fortnite featuring Prizm Gaming 2.0 Lens Technology. This feature reduces glare from OLED and LED screens experienced during gameplay.
The second is Oakley Hydra Fortnite. This design boasts a golden Prizm 24k lens designed to shield eyes while outdoors.
In other words, both product extensions leverage industry authority associated with Prizm technology. Where Oakley translated expertise in creating sunglasses technology into a new gaming product.
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