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

[Jare]

Well I guess "good IP" is pretty much defined as "successful IP". If your game has just a little personality or uniqueness, and becomes a success, then you have a worthy IP. What's the valuable part of Max Payne's IP, the one that contains all the value and the one you can't benefit from unless you bare the IP owner? The name. Not the backstory, not the gameplay, not the character's face... the name "Max Payne", that's all.

It's easy to create good IP, the hard part is making it valuable. :)

Interesting point about cheaply creating properties and then pushing the one that proves popular, sort of the opposite of what we currently see.

[Bver]

How about a new article already? Scott, your thoughts on Revolution, please.

[Charles E. Hardwidge]

"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."

While waiting to see Scotts next move...

I've got a pretty clear picture in my my how better games can emerge, and it involves going back to basics. Bad games are the result of bad strategy at all levels, from the character of an individual, game, or company, and all these are related. Better ways lead to success, and ways of doing are contagious.

I agree with a lot of what Scott says. What problem I do have with the tilt of his blog is that as right as it is, the way in which Scott is promoting better strategies can shut down dialogue as much as it opens up better alternatives. A stronger focus on better ways, examples, and core thinking may help here.

And here's where we get into human nature. Game design, development, and promoting change all boil down to strategy, and this involves really deep stuff that requires character change, and accepting that isn't always easy. People don't like the implication they're losers, especially when it's right.

The way I see it is many people treat life like a game of poker, and have a winner takes all mentality. Others play it like a game of chess, where you attack and defend, with the possibility of win, lose, or draw. As part of my exploration of strategy I've taken a keener interest in Go, a game which isn't based on attacking but growing.

Having an interest in Feng Shui, Buddhism, and martial arts has taught me the value of seeing the 'colour' of an enemy as clearly as possible, the relationships that exist between things, and how there are ways and better ways. More soberly, this shares territory with the academic theories of cybernetics and the business theories of the learning organisaton.

One of the reason why many developers fall of the main stream of thought, or the dominant 'winning way', is because they've bought into the lie that companies who are on top want you to buy. This goal isn't about truth, it's about power, status, and wealth. If that's what you want, you've already lost as you'll be buying into predefined territory that's tilted against you from the start.

A man is the measure of his vision.

[Mr.DJ]

So Scott, what's cocking? :)

hksac,
go spam somewhere else please...

[Jay]

Hello Scott,

I am wondering: how important has it been to you guys at 3D Realms that you own your IPs?

Do you think it was better during the share ware days when a lot of developers could own their own IPs?

thanks for a great blog, I hope you'll update it more often!

[Kristian Joenesen]

"Sorry, but I feel I must point this out: Wolfenstein was not an original IP for Id. They licensed it from the "Castle Wolfenstein" and "Beyond Castle Wolfenstein" Apple II games by Silas Warner"

This is technicaly wrong, Id bought the IP from Silas Warner they didn't license it.

[DD]

I think this board is dead or the whole deal with "hot coffee" is too distracting. What a shame.

[Bob]

Does originallity actually sell? The examples you cited (Doom, Quake and Wolfenstein) and now age old classics and are sold based upon what went before them - dew-eyed gamers thinking how great it was to strafe.

Whereas, really original games in recent times, although receiving critcal acclaim (Psychonauts ro Darwinia for exmaple), just don't sell as much as the big licences games churned out by EA or Codemasters. Even though Half-life 2 is fantastic, it's not really that original...

[Game Producer]

1) "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."

I haven't seen the article so it's hard to tell where those figures come from - so it's hard to analyze deeper. EA owns the rights for Lord of the Rings (both movie and book) - and they make games (and lots accessories) - and I bet they do well. I don't see why it should be home grown IP. (it could be, but don't necessarily have to be)

2) "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?"
Building a brand takes time - that could affect why we won't see many original brands.

And - building a brand game doesn't mean that the game could not be original. One very original RTS game is Battle for Middle Earth for example. It's a game build on familiar brand and done well.

[Wormstrangler]

Come on Scott, where's an article on the Revolution? :)

[rhonda]

This might seem like a silly question. But, I am researching on the game industry and was wondering what does IP actually stand for or mean? It was mentioned in one of the game companies I was researching.

[Anon]

IP = Intellectual Property. I'm not the best at definitions, but basically if you create a game, either you or the publisher will "own the IP" depending on your contract (usually the publisher). Whoever owns the IP has the license to create sequels, t-shirts, toys, etc based on that game and sue anybody else who tries.