Making a great licensing proposal: How to get IP rights holders excited about working with your game

When approaching an IP rights holder to try and secure the rights to use a property for your game, it’s important to be equipped with everything you need to satisfy the questions and criteria they use to assess gaming opportunities. Different IP rights holders (IP licensors) can have very different priorities and strict requirements. It’s up to game developers (IP licensees) to demonstrate an ability to comply with them.

Being prepared can give you a huge advantage, helping you clear some of the initial screening phases and get in front of the decision-makers. One of the easiest ways to be prepared is knowing upfront what’s most important to the IP holder in question.

On the Layer platform, IP licensors reveal the partnership characteristics most important to them, allowing game developers to enjoy a customised proposal process adapted to the specific gaming integration sought and the assessment needs of the IP licensor. The guide below describes the key aspects of Layer’s proposal processes and some tips for improving the quality of your proposals.

Step 1: Review the details of the IP listing 

An IP’s Listing page on the Layer platform is where you’ll find useful information about their licensing requirements. When creating a proposal, ensure you’ve reviewed all aspects of the Listing page.

Key aspects to consider: 

  • Collaboration types: Is the way you intend to use the IP compatible with the collaboration types that the IP is open to?  
  • Limitations and restrictions: Can your game comply with any restrictions around content or exclusivity required by the rights holder?
  • Objectives: If the IP rights holder has stated specific objectives for the property, such as reaching a particular market, can your game help with the pursuit of that objective?

IP listing pages on Layer capture a lot of information about the type of collaborations that the rights holder will consider, as well as any restrictions, limitations and objectives they have.

Step 2: Be clear about how the IP will be used in the game; Show rather than tell.

IP rights holders don’t approve requests that they don’t fully understand. Keep in mind that not all rights holders have deep personal experience with games either as players or from the technical side. For this reason, it’s important to be explicit not only about how your game works, but also the role and appearance that their IP would have in it.

When creating a Proposal that relates to an existing game, your game’s profile on the Layer platform is a helpful resource the IP licensor will use to gain an understanding of your game. The inclusion of screenshots, gameplay footage, markups, concept imagery and mockups on your profile can further help communicate how the IP will be used in the game, increasing an IP rights holder's understanding of your Proposal when it’s been reviewed. Investing the time to visually get your idea across can also show a greater commitment to the collaboration early in the process.

Step 3: Consider how the IP will be monetised

Directly related to how the IP will be used in-game, and often just as important, is how the IP will be monetised. A well-aligned IP partner will often be interested in a monetisation model that aligns incentives and lets them participate in the success the IP brings to the project. This incentive alignment is generally achieved through the use of a royalty. A royalty is a usage-based payment for using an IP, generally calculated as a percentage of revenue generated by the game, or an IP branded in-game item. Establishing exactly which revenue streams the royalty will apply to, and for what duration, is a crucial expectation-setting exercise early in the process of negotiating a license. This might be total revenues, a specific item, DLC or time limit. For blockchain games, important elements like the applicability of royalties on peer-to-peer sales also become important considerations.

A clearly articulated monetisation model tied to the use of an IP makes a proposed collaboration significantly easier for an IP rights holder to review and determine whether it meets the rights holders’ commercial requirements. Ambiguity or complexity too often forces the rights holder to make a lot of assumptions and, absent another strong incentive, makes a proposal easy to dismiss. 

Proposals on Layer highlight a rights holder's preferred models for licensing to games and interactive entertainment. A IP’s profile on Layer will help you understand what is likely to be acceptable in terms of royalties, guarantees and other terms. 

Step 4: Know your commercials and what is appropriate for the IP you’re considering

Many rights holders have specific commercial requirements. When formulating a proposal to license, it’s important to ensure that your commercials align with the rights holder’s expectations. A strong proposal should make it clear how your game will meet the rights holders' minimum financial requirements for a license agreement. This includes being clear about fees or guaranteed minimum royalties and/or providing credible forecasts of expected royalties.

Layer lets you be confident of your ability to meet an IP’s commercial requirements by setting out the preferred structure, limitations and minimum financial requirements for any type of gaming project from new IP-based games to NFT collectibles. It helps to show IP owners the potential of what a collaboration could look like on the back end. Layer provides a forecasting tool, but the more detail you can provide, the better.

Step 5: Consider the audience; Can your game help expand the property’s reach? 

A key part of managing a brand or any other IP is nurturing and growing the audience. Many IP rights holders care about expanding a property’s reach as much as securing a high royalty rate. Games can often play a powerful role in both audience engagement and growth, but you must show that this is true of your game in particular. Being able to identify audience overlap, especially in areas of strong existing engagement or areas being targeted for growth by the IP rights holder means that your game can potentially align with strategic objectives that go beyond just achieving licensing returns.  

Understanding audience overlap starts with data. Layer aggregates audience data from across an IPs social media profiles to help give you a better idea of the geographic distribution and demographics make up of an audience. Follower counts with by-channel aggregation show not just audience size but also the channels most effectively used to reach them. Separate engagement metrics can also give you an idea of the degree to which the IP is engaged with on social media and how strong the connection with the IPs online audience is. 

Step 6: Show a history of success

IP owners may want to know about previous successes you’ve had, whether they’re with IP-based games or just games in general.  Having a strong portfolio of past or existing games helps reinforce the credibility of any predictions or estimates. Any experience with IP licensing in the past can also help demonstrate that your organisation knows how to treat IP and work with IP rights holders. Combined, a record of strong past performance can be a strong indicator of future success, serving to:

  • Reduce any perceived risk associated with how the brand will be treated; and
  • Give credence to any revenue forecasts you provide.

Keep in mind, you want to entice IP holders to take a more active role in a potential collaboration, whether that’s through a mutual marketing commitment, a reduced advance or a reduced guarantee in favour of a more royalty-based license agreement.

Step 7: Remember that we’re always here to help

Our team of experts at Layer can help you shape a licensing proposal to meet the preferences of any rights holder and for any type of gaming project. If you've already registered, open the chat function in the app or, to learn more about using Layer to secure your next IP license, register here.