You can do it with Royal Icing. But I would do it with gumpaste/fondant mixture, as I'm not good with Royal Icing.
I also think gumpaste ot fondant would work the best
I'd think gum paste would be the easiest, but, a run out of RI would be just fine, too. (The run out would be more fragil, so make a couple extra, just in case.)
If the rest of the cake is covered with fondant or gumpaste, I would use that.
Yeah, mix gumpaste and fondant together to make it easier to cut with an exacto blade while preventing from drying hard as a rock. Adding fondant will make it easier to cut the cake, unless it is removed first.
print out the symbol in the size you need it, if you can use thicker paper it would help. Then cut out the picture including the inside area around the S, use this as a template.
Place the template on rolled out yellow fondant/gumpaste and cut out the shape of the diamond background - then roll out red and cut out the S/diamond let them dry a bit then glue the red onto the yellow diamond base.
I hope that makes sense.
That one looks like fondant or gumpaste.. You can use colorflow too.
Thanks everyone, I am definately most comfortable working with fondant or gumpaste and so that's definately the route I will go. I wasn't sure how to get that exact shape, but I guess I will follow the advice to make a template and cut it with an exacto knife. Thanks. I can't wait to make this cake for my little man, he'll be 3 next month.