IP on licensed games

The June/July issue of Game Developer has an article, Playing Smart with IP, by Dan Lee Rogers, that hits on several strong points in favor of original IP versus licensed IP.  One of Rogers' key stats:  If you look at the top 40 console games (lifetime sales) since 1995, 31 of them, or 77 percent, are original brands (including sequels within these brands).  That leaves just nine out of 40 as licensed game brands.  That's near total dominance in favor of original IP.  Some of these top selling brands include: GTA, Mario, Zelda, Pokemon, Halo, Crash Bandicoot, Tekken, Final Fantasy, Metal Gear Solid and Driver.

And about two years ago I read a similar article with original IP winning by 80%.  This earlier article included PC brands, including Diablo, Doom, Half-Life, The Sims, Warcraft, Tomb Raider, Duke Nukem and EverQuest.

So, if original brands control nearly 80% percent of the chart every year, why aren't we seeing a LOT more original games in development?  It's clear that the real gold mine in our industry is with original IP (and their sequels and spin-offs).  Publishers would be so much better off in the long-run by creating original IP versus licensed games.  Owning an arm's length list of home grown IP should be the goal of every publisher, because it gives them ultimate control of their own destiny and revenues.

Yet we have a large publisher like THQ being out-IP'ed by a little game studio like Id Software, who've created three blockbuster IPs, Wolfenstein, Doom, and Quake.

Given the success of original brands over licensed ones, why don't publishers invest more in original IP?  There can be only one answer:  They're not good at it.  They're afraid.

But we need more original IP to put us on the same self-sustaining plateau as TV, movies and novels -- all three of these entertainment industry branches absolutely crush us in total revenues, and by no coincidence, in original IP output.

It's okay to cherry pick a few licenses now and then, but if I ran a publisher (fat chance!) I'd be focused on creating original brands that I fully controlled, and could exploit across other media.  When it comes to licensed IP, other than kids licenses and sports licenses, there are fewer than a dozen licenses from the entire library of novels, TV and movies that are worth exploiting in the game world.  That's right, less than a dozen.  Which is why so, so few licensed games can compete with original games for the top revenue slots year after year.

And yet every year publishers trip over themselves to license Hollywood summer movies, adding value to Hollywood's bottom-line, while spanking ours.  What we need are fewer chicken-shit publishers run by non-gamer financial or legal suits, and instead run by someone with a creative spark in their cranium, who have the guts to ignore financial quarters or slotted release dates.  I won't hold my breath, though.

Comments

[Alan Dennis]

I wouldn't hold my breath either. From my standpoint, creating something original goes against the very nature of publishers - since their business is one of investing in the work of others and then hoping for great ROI. There's no creativity in that.

Publishers have bought the majority of game developers, thusly making the publishers the developers and effectively extinguishing a large amount of creativity that used to exist. The publishers weren't creative before, aren't now, and now that they control/own/extinguish those who used to fuel the creativity in the industry, where can else but Hollywood could they turn for that much needed "creativity" they need in order to create their games?

You pointed out THQ and I think that's an absolutely perfect example.

THQ made Freespace, which was a pretty creative game. (It could have been better, but wasn't bad.) They also made Summoner and Red Faction, both of which were original to a certain extent. Then THQ completely purchased Volition and the last couple projects they've had were Punisher the video game (which was horrible) and some GTA rip off called Saint's Row. (Apparently THQ needed a piece of the GTA clone pie.)

Well, ok... Maybe not the "absolutely perfect" example, but I think you know what I mean. :)

[madsax]

Someone at Siggraph had a slide showing that in the past year, original IP had just 7 of the top 40 titles (or something like that). So I would suggest that the 1995 year might have been chosen to make a particular point in the article. Looking at more recent trends I think you'll see that original IP is losing out to licensed IP big time.

Perhaps someone else was at this talk and remembers what is just vaguely intruding on my consciousness from Siggraph. I think it could have been Dan Arey and Bob Rafei's talk.

[Jay Barnson]

While the top scorers over the last ten years might be original IP and sequels of the same, I'm guessing the bottom 65% or so of the ROI bin is also original IP. That's what we're talking about - risk. You do a licensed game with an established audience, you can almost guarantee a certain level of market penetration with a minimum amount of marketing. You can look at the demographics of the IP audience, and the demographics of gamers, a little bit of historical data, plug it into the calculator and let the math take care of itself. Publishers really, really WANT to be that kind of machine with predictable results.

On top of that, you get your return pretty immediately on licensed property. But most of the time, it's the sequels of an original property that sells. GTA 1 and 2 were forgettable - it wasn't until GTA 3 that the thing became a phenomenon. Warcraft 3 (I think) out-did Warcraft 2, which in turn totally blew away Warcraft 1. I could go on. But "Enter the Matrix?" Or something with "Star Wars" in the title? You could slap those licenses on a text editor and sell a quarter million copies.

[Apar]

I am fairly new to this industry so I dont know how the statistics are compared but one of the things that Jay mentions strikes a familiar chord. there is this constant pull between being creative and financially rewarding I am not saying that the two cannot get go hand in hand but just that they are two separate goals one important to the developer making the game where they are trying to introduce new elements of "fun" (dont want to just use the terms gameplay) where as the publsiher is worried if that thing will ever sell and how much will they get back. I remember being part of a developer team where in the the VC actually made a statement to the affect "...you guys are a team of 20 so you develop 7 games a months (casual games for the web) so if we got 40 people you should be able to deliver 14 games each month and based on that rate deliver 168 games in a year" I dont know why this sounds ludicrous to me

But coming back to the article and the statistics I dont know this and what would be interesting to compare is how many original IP's were launched since 1995 and how many actually succeeded and during the same time how many licensed games were released and succeeded. Finally if you compare the top 10 Original IP games of all time and top 10 licensed games of all time (1995 as a benchmark) what was the total collection of those. I havent read the entire article but from the little description I got I think its very easy to get skewed numbers. But then what do I know :)

[gf]

Those statistics focus on how big one individual title is, I wonder how much money licenced IPs, chunked together, made them, compared to original IPs. Throw out 50 junk games with shorter dev cycles based on licenses vs. 5 (or whatever) original IPs, which will make them more $ at the end? I have no idea whether it's one or the other, I just wouldn't be surprised if they make a lot of cash by pumping out more licensed crap, because those have favorable sales-potential:investement ratio. Quantity over quality.

[Mark Ventura]

Isn't it a little ridiculous to go all the way back to 1995 for stats like these? The industry has changed. Most of the top selling brands you list took advantage of market conditions to become what they are--for example, everybody who had an NES played Mario and Zelda (Mario came with it!); there just wasn't much variety available. And the early licensed games were pretty terrible. (And isn't Pokemon a licensed IP? I think the anime came first.)

"When it comes to licensed IP, other than kids licenses and sports licenses, there are fewer than a dozen licenses from the entire library of novels, TV and movies that are worth exploiting in the game world. That's right, less than a dozen. "

I'm sorry, Scott, but that's just ridiculous. There are millions of novel, shows, and movies. I bet I can come up with a dozen success licenses that have already been exploited.

1. Star Wars
2. Lord of the Rings
3. Chronicles of Riddick
4. Dune
5. The Matrix
6. Spider-Man
7. X-men
8. Tom Clancy
9. Star Trek
10. Harry Potter
11. Batman
12. James Bond

Don't get me wrong, I think original IPs are better, too, but I don't think you're being honest with yourself.

[Jonas Antonsson]

There has to be a balance. Licenced games can create a stable ground which can, in turn, be the basis of innovative (and more expensive) original IP development. EA Games uses this formula, to some extent, but I don't think many gaming houses do though. Original IPs are becoming more expensive and harder to market - this adds to the risk factor so it becomes hard to sustain a gaming house on original IPs alone (save ID Software).

J#

[Jose Zagal]

Quake came out in '96, so iD haven't created any new IP since then! And from the list of top IP you mention pretty much everything on that list is more than 10 years old! (except Halo and Driver?) So, the question is what original IPs have we seen in the past 10 years that have been very sucessful.

The answer is not that many, and one of the reasons is probably due to the fact that the industry/marketplace can't support that many. So, how many original IP "brands" can the game industry maintain at a given moment in time and what does the industry need to do so that it can support more brands?

[Scott Miller]

I just clicked on the Video Game Buzz Index (link on the right side, under Blogs & Links), and of the 20 game titles getting the most buzz on Yahoo, only *one* is a licensed game, Madden Football.

Regardless of the validity of these statistics -- and they are somewhat valid -- there can be no argument that the game industry needs to favor the development of original brands over licensed ones. Publishers (and studios like Id, Valve, 3D Realms, Remedy, etc.) gain so much more value and control over their future by working on original games (or their sequels), instead of licenses owned by other media branches.

-- "the question is what original IPs have we seen in the past 10 years that have been very sucessful."

And likewise, the majority of the licensed IPs listed by Mark are 10+ years old. But more to the point, your comment perhaps indicates that in the past the game industry was much more open to making original games.

-- " There are millions of novel, shows, and movies. I bet I can come up with a dozen success licenses that have already been exploited.

Mark, your list pretty much nails the top licenses that work in the game industry, and that's about it. And I'd even argue that Batman and Dune do not belong on that list, and that Tom Clancy isn't really a license, either. People think of Splinter Cell or Rainbow Six as the brands, not Tom Clancy. For example, Splinter Cell is essentially an original brand, and not a license.

Even The Matrix is misleading, and I wouldn't consider a successful license. Enter the Matrix is an exception simply because it was released day & date with the most anticipated movie of all time. I really doubt future Matrix games will be successful. And Harry Potter is a kid's license, and I've already said that kid's and sports licenses are exceptions, because kids are MUCH more prone to go for brands they know. And sports licenses are merely stamps a authenticity to the sport.

[Tadhg]

I think these things wax and wane, as games are not the only medium currently engaged in this sort of IP mining by any means. It's all over the movie industry, with films based on comics, old tv series, books and true stories far outweighing original stories. The music industry seems to wholly consist of covers, remixes and such. Factual books, history and biographies have never been so popular.

We are, as a culture, very focussed on the past and recognisable brands right now, and business responds to that. The reason that the publishers have plumbed for known IP etc is because they know it worka. You can wave as much evidence of long-term growth in their face as you want, it doesn't matter. Quarter-to-quarter, chart-to-chart, they see the likes of the Incredibles at the top and that's what matters.

No business on earth is entirely rational, it is always based on perception (this is why we have boom and bust economies to begin with), and right now the perception is that that the past sells. Recognisability sells. People lose their jobs or get promoted based on first week performances in the charts. That's what's important.

There are two things you can do in this scenario: Get on board or innovate out of the way. The one thing that blogs and such aren't going to do is change it though.

[Scott Miller]

Tadhg, unquestionably, blogs aren't gonna change a thing. In fact, it benefits 3D Realms that the industry is such as it is, because it makes it a LOT easier for my studio to keep creating original brands, like Max and Prey. If everyone else was doing it, there'd be a lot less fertile area to explore and exploit. But while the industry's strong reliance on licenses is a plus for 3D Realms, it's a net negative for most other developers, who are never given a chance to bust out of their rut. It's also a net negative for the industry, which needs to be seen as a stronger creative force and as having its own strong creative identity. And, as I said, publishers make more money from hit brands they own, than from hit licenses, where profits need to be split with the licensee. Not to mention, when a studio or publisher owns a hit brand, they get to exploit it outside the game industry, a la Tomb Raider, Doom, Mortal Kombat, Resident Evil, etc. (Sure, these exploitations haven't always been successful, but that's another issue. Just as very few movies will ever work as good games, the reverse is true.)

[Tadhg]

I agree with you Scott. But the thing is that while the industry is so convinced of its chart-dependency and so on, developers will never 'be given a chance'. Evolutionary capitalism has it that only the innovative survive, so roll on online distribution and far more efficient tools, utterly different marketing strategies and artistic aspirations. Those are the things that will generate success in the long run.

[PaG]

Other industries, particularly entertainment industries, use a trick that is seldom used in gaming: they market the creators too. There's probably millions of new books published each year, but if one is written by Tom Clancy or Stephen King everybody takes notice, even if it's something completely new. If Steven Spielberg releases a new movie, people take notice because they know him. A new CD by U2 will sell millions just because of the fans of the group even though the actual CD is unrelated to some other IP. Even in gaming: I took interest in SimGolf because it was by Sid Meier, if a no-name developer made it I certainly wouldn't have cared.

Why don't publishers market the creators? I have no idea who the lead designer on GTA: San Andreas was. He did a great job, I work in his own industry and yet I don't know who he is. Publishers should at least market the studios: it did a lot of good to iD and Blizzard, yet most development studios remain unknown. The publishers try to get attention on themselves, but that doesn't work, people aren't stupid. Would you buy a book because it was published by Berkley Publishing Group? No, but you'd buy a book written by Tom Clancy. Why should player care if the publisher of a game is Take 2 or THQ?

Marketing the creators of games would reduce development risk, allow development of succesful new IP that have high long term value and would help keep the best talent in the industry (everybody loves to be famous...). So why won't publishers do it?

[Tadhg]

PaG,

That's true. But the problem in doing that is that by marketing a person you are giving them the power, and for the franchise-minded business of today, that is dangerous. Authors can move, make demands and so on. However, an author has much more lifespan - especially if they reinvent their work regularly - than any franchise because they have personality, can be interviewed by journalists and so on.

It used to be the case ten years ago that development companies filled this author niche, because they were small and quite obviously individual. Teams of 2-10 people have a voice and a close working relationship, like a band. However, nowadays a team of 100 is just another division inside a larger business. The more people come on board, the less distinctive the voice becomes, the less interesting the work, and so developers have lost out that individual sense. They need a strong personality to be the author figure, to direct the efforts of the team and so on. There aren't many people in the industry who have the ability to do that, but they are beginning to emerge.

[Jose Zagal]

-- And likewise, the majority of the licensed IPs listed by Mark are 10+ years old. But more to the point, your comment perhaps indicates that in the past the game industry was much more open to making original games.

Well, there is a difference between making original games and developing original IP. (and yes, sometimes they mean the same). I think that Nintendo is a particularly good example of having both its own IP, milking the heck out of it and also making original games...

For example, the following games all feature old IP (as in, already known when the game was released) coupled with original games:
Wario Ware, Kirby's Canvas Curse, Super Mario Kart, Super Smash Brothers, Pokemon Snap

I agree that it is vital for dev companies to retain their own IP and that, once established, they can use said IP to experiment with novel gameplay. (I would bet real money that Katamari would have sold 3x as many copies if it had been KataMario...maintaining the same gameplay)

[cliffski]

Tadgh is right again (shock!) when he mentions the fundamental difference between the good old 2-10 man teams and the modern cubicle farms that are 'triple A' development teams. I would go so far as to suggest that your ideal team size is 1. Occasinally that means your whole team are totally offbeat or even clinically insane, but its from that environment you get the real good ideas, and likely, the good new IP. Nothing creative comes out of huge teams, unless they are working on IP created previously by a lone creative mind (like The Lord of the Rings). The larger the team, the bigger the chance of 1 or more of the team suddenly standing up and saying "why dont we make it more like game 'X'" with 100 people to 'keep on board' any interesting idosyncrisies in your IP will soon get dropped. The chances of Max Payne being anything other than a chisel jawed white guy were always slim. It's no suprise that the reasonably proportioned black female lead in 'Urban Chaos' came from a small company (mucky foot).
As far as I can see there is really only one person in game dev who has really seen the light here (apart from me obviously) and that's will wright with spore. He has spoken out against the cubicle farm overblown development process of modern games. Lets just hope he really means it.

[Mr.DJ]

This project needs support: http://www.projectoffset.com/news.html

So, what do you say Scott...any predictions? :) And could 3DRealms help perhaps?

Cheers!

[Robert Howarth]

If I was a publisher, I'd push original IPs like you suggest, but I'd also own them (and the developers) and push in-house studio development.

If I was a developer, I'd also push original IPs, retain them and do sign publishing deals on a per project basis.

Problem is many developers aren't good enough to have hit games time and time again, so they fall into the publisher dependence trap and make licensed products.

[Greg Findlay]

To me, the model that makes most sense as a publisher would be to use the "more finacially secure" licensed games to fund development of one or two original IP's to the point where development of those games could go on indefinitely (indefinitely isn't realistic but at least secure enough that you aren't going from milestone to milestone wondering about finances). Then spend a great deal of time and effort making sure that those original IP's are extremely high quality with potential for expansion. So why aren't any publishers doing that (and if there are who are they)? Is it to difficult to get enough successful licensed games?

[PaG]

It's certainly true that the marketing of creators gives them power and thus reduces the control of the publisher. I believe however that the gains are much greater than the loss here. If it wasn't the case, then other entertainment industries would stop marketing their creators. They don't because it pays to have famous creators working for you, even if they could potentially work for somebody else. Can you imagine the book industry not putting the author's name on the top of books anymore, or the movie industry not using big name stars? It would seem ridiculous, yet that's exactly what game publishers are doing­.

Cliffski is also right to point out that design by committee doesn't work. If you have 100 people working on a project and all of them have a say on what the game is like, you lose clarity of vision. Too many cooks spoil the pot. Movies -- that often have teams much bigger than the biggest games -- solved this problem by giving a lot of power to a few people at the top: the screenwriter, the director and the producer. While having few people in control kinda sucks for the rest of the team, it also ensures a higher quality product. Having a single person in control would be dangerous however, because that person can do stupid mistakes without anybody to point it out (trust me, I know: I did some terribly stupid stuff when I was working alone as an indie developer).

I guess the best way for developers to get their names known is to take the matter in their own hands. Instead of waiting for the publisher's charity, the team makes them an offer: if they get their name in big letters on the front of the game box and above the title, they ask for 5% less money for the development of the game. That's a good deal upfront for the publisher, so their likely to agree. It's also a good long term deal for the developer, since it strenghtens their brand a lot. I guess individual designers or producers could do this too, but their weight in the budget is much smaller so it's less convincing.

[Scott Miller]

PaG, I suspect you're overplaying the marketing of creators in other industries. In the music industry, the band is the brand, and so there's little choice but to market the band (the creator). Also, in many, many cases, studios sign up a singers for so long that it no longer becomes risky to promote them, because they cannot leave.

In the movie industry, only stars get promoted, as well as only a handful of directors--directors who have become so well known due to the popularity of their work. Other than a very limited number of directors, no creators are known. Who can name a script writer (the true creator in the movie industry), for example?

For novels, creators are known, but hardly promoted, except a limited few. About the only PR a novelist will get is a book tour, and that's really just a book selling method more than anything else.

In the TV industry creators are hardly known, and promoted even less.

So, by my analysis, our industry is no different than most, save the music industry, which is a special case.

[Tadhg]

"Who can name a script writer (the true creator in the movie industry), for example?"

Er, no. :)

It took me a long time to realise this (having screenwriting aspirations and all) but a film director is actually the true creator of the film industry. You cannot make a good film out of a bad script, but a script is just writing on paper without a director to interpret it and give it vision. There's so much in a film that doesn't appear in the script (and is largely regarded as unwelcome if it does), and there is a monumental difference between scribbling an idea down and trying to figure out how to do it and how to best tell the story visually.

This is where films differ from theatre, and why film writers get less respect compared to directors than playwrights do to theatre directors. The theatre is a more static form and the art of a play is very linguistic. It requires interpretation and direction, but with a play the voice of the playwright is what comes through. In film, it's different because the artform is much less linguistic and much more fluid.

This is also the key difference, in my mind, between a game designer and a game director. I used to think that a game designer could, given time and the right tools, produce his vision on paper and have a team create it. I now realise that that is fantasy, not least because most people only absorb 20% of what they read, but because the number of issues and potential discoveries that happen throughout the life of a project need someone central, focussed on the vision, steering the whole thing.

In music, the band is the brand.
In movies, the star is the main brand, but the director is also the brand ("a film by").
In books, the author is the brand. There are a lot of authors so only a few become well known. But you can say the same thing about music and movies, as there are 100 unknown bands and actors out there for every successful one. In TV, like-wise.

So the pattern is the same throughout. What is apparent is that people matter to branding in all these media, because they have 'legs'.

Compare this to comics. In the US and UK, comics are franchise-led. They were more franchise-led in the 70s than they are today, but they are still largely governed by the superhero comics despite the rise of a few authors (Moore, Morrisson, Gaiman etc). The result of them being franchise-led is that creatively stalled for a long time, and they financially stalled as well. It was only a few short years ago that Marvel were filing for Chapter 11, remember, until the movie industry basically saved their bacon.

In France, on the other hand, there is more respect for authors than just for titles, and the French industry is more robust, broadly appealing and healthy as a result.

Franchise-led creativity is bad. It's bad for IP, going back to the original point, because it leads to 'more of the same' thinking on the part of the bean counters. It's bad for the medium because it discourages experimentation (I'm thinking of your previous post about Ico here), and it discourages a wider audience because all they see is very heavily single-market catered tat. There's no vitality in franchises.

There is vitality in author figures, in what I'm calling the emerging class of game directors, in true independent dev teams working away in the darkness of the web like the bands of old. It's people, in the end of the day, that sell a medium and sell an artform, not brand labels, over the long term.

We need to get to the point of seeing "a game by" on boxes. Viva la revolution etc.

[Scott Miller]

Tadhg, while you're right that the director is the visionary, it's still the script writer that is the creator. As you know, nothing moves in Hollywood until a script is written, and that's when a director or star or top producer gets attached to it, and drives it to production.

I think eventually we'll see more games that are driven by a director-like game designer who is the recognized visionary, and these people will become better known. But, I think only 5-10 will ever become well known, just as there are only 5-10 movie directors that are well known.

[PaG]

My original point was that if you market the people, then you get something stable to use as a brand. That way, you don't have to use the franchise as the already-liked element, you can use the people. It doesn't really matter if those people are the true creators of the thing or not, on a marketing stand-point it's the brand that matters. That's why the star system works in Hollywood: a lot of people go see movies just because Brad Pitt or Tom Cruise is in it and not because of the franchise. If you create an entirely new movie it's going to be much easier to sell if it's got a big star in it. Sure, you could argue that the real creator is the scriptwriter, but we're talking about marketing here and not rewarding the real creators.

[Tadhg]

"Tadhg, while you're right that the director is the visionary, it's still the script writer that is the creator. As you know, nothing moves in Hollywood until a script is written, and that's when a director or star or top producer gets attached to it, and drives it to production."

Indeed, the initial idea will often as not come from a screenwriter, but whether that consists of 'true creator' given that the script is only 10% of the creative work of a film is an argument of opinion, especially when it is very common for directors to re-write, re-edit and hire wholly different writers to work on the script.

Back before the mid-50s, incidentally, film directors were not considered as such. It was thought that they were simply there to coach the actors, and that the real creative force on any film was the producer.

Sound familiar anyone? :)

"I think eventually we'll see more games that are driven by a director-like game designer who is the recognized visionary, and these people will become better known. But, I think only 5-10 will ever become well known, just as there are only 5-10 movie directors that are well known."

Probably.

But my hope is that, as in film and theatre etc, those high profile figures will have the ability to raise the standards for everyone else, through co-ordinated efforts etc.