IP partnerships in games can be lucrative business

As the games industry has grown over the decades, the use of external licensed IP has been a well-trodden strategy to attract a large audience. Blockbuster franchises like James Bond (Goldeneye, Nightfire), Marvel (Marvel Snap, Marvel Contest of Champions) and Star Wars (Battlefront, Star Wars Jedi: Fallen Order) have all been given the games treatment.

Some of mobile’s most successful titles have been built on big licenses, including billion-dollar hits like Star Wars Galaxy of Heroes and Marvel Contest of Champions. It makes sense from a user acquisition standpoint, supporting both organic and paid marketing campaigns with a recognizable name and famous characters that consumers are already familiar with. It’s especially helpful following Apple’s app tracking transparency (ATT) changes, which make it more challenging to target the right players.

Titles like Marvel Snap, as well as being a well designed game, have been able to gain an advantage by harnessing globally famous IP, rather than having to develop something entirely new from scratch.

The right match

Things don’t always work out, however. While Kabam’s Marvel Contest of Champions has been a surefire hit, the studio’s follow-up, Transformers Forged to Fight, struggled on the market. Though Transformers is a popular IP, it doesn’t have a deep roster of popular enough characters that resonated with a mass audience on mobile and fit its gacha monetization mechanics. There needs to be a desire for players to obtain numerous characters, or the model simply won’t work.

It’s an example of how getting a big license isn’t enough on its own. The IP needs to fit the game design, which also needs to match fan expectations and tastes. Outside of mobile, many of the same challenges and opportunities apply. In recent years, IP holders have arguably taken the games industry more seriously, partnering with premium studios with big budgets to bring their franchises to life on gaming platforms. Insomniac’s Spider-Man series has been a huge hit, with Sony revealing the studio’s titles had sold more than 33 million copies as of May 15, 2022. Spider-Man 2 is set to launch on PS5 in October 2023, while Insomniac is also now working on a Wolverine title.

But again, even with big budgets, IP-based titles don’t always match expectations. Action-Adventure title Marvel’s Avengers from Crystal Dynamics was set to be backed by an extensive live service strategy, but failed to garner a large audience, despite its blockbuster IP. It was announced in January 2023 that support for the game would stop and that it would even be removed from storefronts as of September 2023.

Another way IP has come into gaming is through licensing partnerships for special in-game events and cosmetics, such as new character skins. Fortnite has had a plethora of partnerships, from Star Wars and Marvel to Attack on Titan and Dragon Ball Z. Meanwhile, mobile title State of Survival partnered with AMC Networks to license The Walking Dead, helping spur over 20 million new players to the game. The game’s publisher, FunPlus, also partnered with Warner Bros. Interactive to bring The Joker to the strategy title

Entertainment expansion

Though licenses from other mediums have had mixed success in games, in recent years, the games industry’s own IPs have become powerful entertainment franchises in their own right. Gaming’s reputation in film wasn’t particularly highly acclaimed after decades of numerous failures, from the critically panned 1993 Super Mario Bros. movie to the commercial flop that was Doom. 

But as the game’s sector has grown, so has the popularity of its franchises, and also the quality of output across film and TV. Movies like Detective Pikachu and The Super Mario Bros. Movie have been commercially successful, while HBO’s The Last of Us TV series garnered worldwide attention and critical acclaim. 

Large entertainment conglomerates are snapping up new IP to build up their streaming services and get people to the cinema. Games franchises are increasingly seen as a viable license to this end, given the large, engaged audiences of the top titles, such as Mario and Pokémon (the latter being the most lucrative entertainment franchise in the world).

Even in the games industry itself, game IP is now transferring across to different platforms. Nintendo has brought its franchises to mobile, launching the likes of Super Mario Run, Mario Kart Tour, and Animal Crossing: Pocket Camp. Those titles have generated hundreds of millions of dollars in revenue, while Fire Emblem Heroes, designed as a more traditional mobile title, has accumulated more than $1 billion to date.

Other console and PC franchises continue to find their way onto mobile, too, bringing with them huge success. PUBG Mobile has surpassed $10 billion from global player spending across the App Store and Google Play, according to Sensor Tower estimates, making it one of the most lucrative mobile games ever.

Call of Duty: Mobile has generated $3 billion, Fortnite generated $1.2 billion on mobile before its removal from the App Store and Google Play, and data.ai estimates that Diablo Immortal has cleared $525 million in just under a year since its release. Ubisoft is also set to bring key franchises to mobile with Assassin’s Creed Jade and The Division Resurgence. However, another major console publisher, EA, has canceled its mobile Apex Legends and Battlefield titles.

The large investments in licensed IP in games and the successful expansion of gaming IP to other medium’s is a reflection of an evolving entertainment landscape and the industry’s maturity. Gaming is now a globally pervasive medium that attracts all kinds of players across a variety of platforms – and it’s the most lucrative entertainment medium in the world.

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