Welcome to the first episode of Layer’s Licensing in Games Video Series, where we talk about everything there is to know about licensing into games. Today, I’m thrilled to be joined by Simon Kay. Simon is a veteran of both the licensing and gaming industries, and brings a really unique perspective to the topic of licensing in games having worked extensively with both brands, and game companies. Today, Simon is gonna be sharing some insights for developers and publishers about why they should consider working with licensed IP in their games, and also talk a little bit about how they can ensure their brand collaborations are successful. So thanks for joining me, Simon. How are you?
Yeah, good. Yeah, not too bad. We’re on different sides of the world, but the world seems to be smaller than ever.
Yes, exactly. We’re back from Gamescom, very busy week. So, I thought we’d just start by talking about your background a little bit. You’ve got a really interesting background. Like I said, in the intro, you’ve worked on the licensing side and on the gaming side. So, why don’t you tell me about how you got into the crazy world of licensing IP into games?
Okay, let’s try and keep this as short as I can. So, it’s 25 years of doing it in about one minute. So, university placement had to find one, ended up with a company in the UK. They had a lot of IP rights. They wants to get them into computer games. They didn’t have anybody in their staff that knew computer games. I grew up playing them. I knew certain developers and publishers from reading magazines. I got the placement. They had a lot of sports IP, and also so the great stuff. And cutting a long story short, the first deal I ever did was for the Scottish Open Golf Championship with Carnoustie Golf Links in a golf game that was made by Jeremy E. Smith, whose team went on to build Tomb Raider. So that was the first thing I ever did in licensing. And ever since then, I’ve worked with brands, with agents, for developers, with publishers, across all genres, whether it’s sports, sci-fi, kids entertainment, character, etc. whether that’s for whole games or integrations. And it’s across anything from PC to console, to mobile, to social casino, to online wagering, etc. So, probably just about less than a minute, but that’s my answer.
You’ve done well to keep it less than a minute, knowing you. So, I think we’re seeing a lot more licensing into games in the last few years and the landscape is really changing. So, firstly, for game developers, publishers who aren’t working with licensed IP or maybe they’re just sort of dipping their toe in the water at the moment, why do you think that game creators should consider working with licensed IP?
I think the biggest thing that’s changed in recent times is the volume of opportunity and the increasing ease to which you can integrate IP into your game. If I can get back to when I started doing this many years ago, there was only CD ROMs and cartridges and between, probably, 50 and 100 companies globally that you’d ever consider doing licensing with, because it was a niche, and it was growing. Whereas now, we live in a world where there are thousands of developers, thousands of IPs, and goodness knows thousands of potential content integrations that you can do and different ways to use those integrations. It doesn’t have to be a whole game, like it used to be back in a day of CD ROM and cartridges. It can be an integration that can be for a short period of time, that can be for an IP, that can be for a character, that can be for a brand, that can increasingly even be for a weapon or a backdrop or a vehicle. So, the ability to monetize things is much greater, the process has become much smoother. Many years ago, many IP owners didn’t really know how this space worked. There are still many that don’t, but it’s a lot better than it was. And the last five years has meant that every IP owner and or agent or game developer or publisher should really be looking at this to add value to their creation.
And I guess, one of the things that we see when we’re talking to publishers and developers is, they talk about how IP kind of brings them this audience to work with and things like user acquisition for a new game, whether you’re talking about retention for an existing game, those things become a lot easier. So, is that something you’ve seen, something is a motivation in your time in licensee?
Yeah, it’s always been there. But more recently, it’s become more important. The cost of user acquisition is growing exponentially all the time. Previously, IP would have been viewed as something that was too expensive, next to the benefit when you add the approval process and the time and everything that’s required to get integration to market. But the cost of user acquisition now is so high, licensing an IP, whether that’s for a whole game or for an integration or for a period of time, is now more competitive probably than it ever has been. So, whatever type of game you’re building, the need to keep your audience engaged or the need to attract new audience, licensing IP is, probably, more viable than it ever has been.
Yeah, and I guess there’s probably a part of that where licensing into games, I think about when I was a kid growing up playing games, and it was like, you built an entire game around this IP, right? And it feels as though, that might be a lot more efficient now to monetize and might be a lot more attractive, because we’re talking about a lot of these content integrations. And there seems to be a shift more towards live ops and that type of thing in the industry. Is that sort of something that you’ve noticed as well?
Yeah, it all comes together. I mean, the element of building a whole game, and just hoping that the game will be successful in its own right, or integrating an asset and hoping that that will be successful in its own right, that doesn’t work. It’s a coming together of a variety of things. The parties have to work together, the audience communication, the live ops, how the integration is communicated from a marketing perspective, various different departments have to come together to make something successful. There’s many examples back in the day of brand slapping or making a game and the integration from the product quality, the loss of the IP, the delivery of the whole thing. And that’s happened even in recent times. So, even if you take on an IP, the blend of all those elements, whether it’s marketing, user acquisition, live ops, how you work with your community if you’ve got influences that push your game, everyone’s going to be aware of why you’re doing that integration or what the objective is, and to make it look as seamless and fluid as it possibly can. So, one of the biggest things to always make sure you’re not doing is the proverbial brand SAP and hoping that the IP is going to do all the work for you.
Yeah, I know, you talk about that a lot, which is — I hear you say — the love for the IP, right? And it’s probably a good segue into our next question, which is a really common question or topic that I think comes up in licensing in games a lot is, what makes a good license game? What are some of the best examples of collaborations? And we often see, there’s clearly like a love for the IP. So, in your experience, what are some of the best things that go into a successful collaboration? What are those key ingredients?
Well, time. Time is money. And money is time. There’s always premium IP that is going to cost a lot of money. And if you’ve got a great game, they’re going to want to work with each other. But there’s nothing better than taking time to understand: What the integration is going to be like? Why you’re doing it? What’s the message that you want to get across to the audience that you’re selling that to? Is that your current audience? Is that new audience? Are you looking to use that IP to attract them to it? So, there’s various different layers to that integration. But that’s probably the top one is to understand the IP, take your time to establish why that resonates with the audience and how you’re going to integrate it. Because if you spend that time doing that, more often than not, the commercial conversation should start to take care of itself. There are exceptions to the rule. If you want to go after StarWars or whatever it might be, not negating the creative there, because it’s just as important to them as anybody else, but I’ve often said that the get out of the commercial figure of how much money is this going to take is more relevant to some than others. But the thing that is the most consistent is the why are you interested in this IP, what are you going to do with it, and how are you going to deliver.
How important do you think it is to have a really good alignment between, I guess, the game somatic and the core mechanics of the game and the IP. It doesn’t make a lot of sense to take like, Mickey Mouse and put him in a first person shooter. So, how important do you think that is? And I guess what would you say to developers and publishers considering, looking at IP, how can they use that to create a compelling pitch to an IP?
Well, you can’t go wrong with having some love for the IP in some way within your team. Some of the most successful integrations or games have often been whether somebody within the development team or a core part of the development team that is a fan of the IP that actually can embrace that, and creatively understands that, because the opposite of that is the worst ones, where an IP is taken and it’s given to a creative team where they try and make something, and when it comes to the approval process or when it comes to the final product, it just doesn’t feel like how it should do. So that’s, I think, the biggest piece of advice is, yes, there are some IPs where the commercial conversation will outweigh the creative. But ultimately, the most successful ones are where the money talks for itself. Because the creative and the quality of the delivery is so exponentially cool. It doesn’t have to be top notch all the time. But if your objective, whether it’s user acquisition or retention or all the things we’ve discussed so far, you wouldn’t be doing your own game justice and your own audience justice, let alone the IP, if you didn’t take time to understand what that’s going to look like, how that’s going to be delivered, and ultimately, how it monetizes.
What are some of the best examples you’ve seen of IP in games, talking about the sort of thematic fit and the love for the IP, if you’ve been around a while, like I guess, what are some of the best examples? And then, why were they successful? And I guess, maybe, like, how did those games perform that in terms of downloads and that type of thing?
Well, I think there’s a couple of random ones there. I think one of my favorite ones was timing and the IP and the integration, the quality of that delivery, and actually, it wasn’t in a console game or mobile game, but is actually an online wagering game. And that was a game that was done for Jeff Wayne’s Musical Version of the War of the Worlds where it was a timing opportunity, because the whole space was looking for IPs that had a music connection, because the demographic was right, but the creative from the company was driven by guys that love the IP and they created something. And because the IP came with the music, which is quite rare, the ability to build something that hit the audience perfectly, hit the narrative, hit the game style, so even the mini games are perfectly iterated, the narrative was there, then the user can integrations were there and it became incredibly successful next to everything else in the space, not because it was the IP, it was because it was the package of all the parts. And it did incredibly well compared to the benchmark at the time. The operators wanted the product. They love the product. They love the site to have music. They love the fact to had story line. They’d love the flow of the product, the journey. Consumers loved it. So, it was just a perfect integration of an IP on all those different levels. Then there’s other ones that have like — I don’t know — recently Fortnight integrations. Some of their integrations with what they’ve done with some of the StarWars and Marvel assets, just done brilliantly. It’s just perfectly brought together and they’re big. And not every developer, I know, can do it to that extent. But the question was, there’s a range there, there’s one way as a small developer, who created something amazing by understanding all those different elements of the process, that we said, previous questions, and then there’s the other one went up product is just so great, that the integration becomes a lot easier, the money flows a lot easier, because it’s already there.
Yeah, and I guess like a lot of those integrations make a lot of sense, or that they have this way of getting them to make sense in that universe. So I guess, interestingly, you’ve kind of touched on, it doesn’t always feel so IP is accessible for a lot of smaller developers or publishers. Because what some advice you would give to someone who’s not an AAA studio when it comes to working with IP? How can they evaluate what’s the right IP to work with? And then, what should they be trying to do when they’re approaching a license?
I think we work back from, who they are, what their game is, what their capabilities are, what their objectives are, what do they want to achieve, as we touched on earlier is licensing IP one of the options for user acquisition for retention of their audience, because increasingly, obviously, in mobile and certain platforms, the audience is incredibly nomadic. So, the first thing probably is to look at your own product and understand that, whether there is an integration opportunity there? But also, do you have the capability as a team to run that integration across the different areas we said earlier. And can you make that work? When it comes to the pitch to the IP, if you’ve done that, and you know yourself what you want to do and how you’re going to do it, then you’ve got to come into the perspective of, how am I going to do it and how am I going to attract this IP to be willing to let me put this into my game. And the principle of that doesn’t really change no matter what size of developer you are. Okay, it might do at the top echelons of Fortnight’s, etc. Because the IP knows to go to make substantial amounts of money. But if the developers and publishers there are further down the food chain as such in comparison, he can’t go wrong with the first steps. But you can also go wrong with nurturing the relationship with the IP by showing them that you understand their IP that you’ve taken the time to consider how it’s going to work or why it’s going to work, not just from the creative perspective, but also the revenue generation perspective. If you’re a small developer, and you might not have the ability to pay the substantial advances and minimum guarantees, the big boys in the space might. Let’s look at the revenue generation opportunities. What are the projections that you might have over a period of time? Is this something where you help ones have multiple integrations? Because integrating an IP isn’t just about as we said, the whole game, it can be multiple integrations within a game. You may already have a shooter game on a mobile platform and you’re thinking, “Well, where I can get weapons to enhance my retention or potentially attract a new audience or to enhance monetization.” Then you can look at maybe drops once every 3 months or 18 months, and acquire six IPs. You might be able to get six weapons. You might be able to get a shotgun from Terminator two. You might be able to get — I don’t know — the original pistol from Judge Dredd. You might be able to get a samurai sword from Kill Bill. But if you think that through and then apply it, once you pitched that into the IP, you’ll get a much quicker answer and a higher chance of success. It’s not always just for the big boys. Increasingly, the way the market is, as we discussed earlier in this chat about the integration opportunities that now exist, there are opportunities to every IP. Every IP is talking about this sector. 20 years ago, they weren’t. The biggest revenue generator would have been toys, from a merchandising perspective, or they’d have been hopeful, if they got a movie out of something. And then the merchandising off the back of that. This space now drives conversation, integration, revenue generation and marketing, obviously with the metaverse and everything else there now, if you’re not looking at this space, either way around, whether you’re an IP owner or developer, then you’re not really taking it as seriously as you perhaps could do.
Interesting. I guess, working on the licensing side, you’ve seen a lot of successful deals. And I guess a lot of the advice that I often see about how to approach a licensor is very much from a game creator’s perspective. What does the licensor want to see in a deal? I think that’s really important, something that isn’t necessarily spoken about enough is, yes, you want to make sure that as a game creator, you’re getting terms that are suitable for you. And you’re getting the right IP. You’ve carefully evaluated that IP. But it’s a dance. You need to make sure that the licensor is taken care of as well. So what are some of the things that developers and publishers should be doing when they approach a licensor and they’re sending that proposal for an IP?
I think sometimes why many developers don’t get into this space is it feels very complicated. It feels like there are too many hoops for them to jump through. It feels a little bit too hot. So, they’d rather kind of keep away from it. And they’ll focus on their own evolution of their own IP. They keep control of everything for themselves. So, there are always concerns or worries for developers as much as there is excitement about what they could do with an integration. For an IP owner when something comes to them, and what they’re looking for simplifying it is, as we’ve done in this call so far, let’s not overcomplicate it, you know why you’re looking in IP, you know what you want to do, you’ve just got to make sure that you communicate clearly to the IP owner: who you are, what your background is. If this is for an existing game, what is it about this game that’s so successful? Why is it relevant to the IP? What’s the commercial model? How’s that IP going to generate revenue or what’s the marketing hook? Because, sometimes, there are deals that can be done where a [unclear 20:08] deal might be possible. It might not always be advanced as a minimum guarantee. Sometimes, there might be fees. Sometimes, there might be other creative hooks. But the more you put into the drive to demonstrate the why and your love for that IP and the creative perspective, you’re going to be taken a lot more seriously than if a random email turns up and says, “I’d like to do this.” We can really save time. The licensing IP can be a drawn out process. It’s not as simple as sending an email. You’ve may as well spend the time putting some effort into the core principles of why you want it. How it’s going to work? Your love of the IP? What the revenue projection might be? It validate you a lot further, a lot quicker. Otherwise, it can take an eternity, and then you’re just gonna get turned off it. So, the more we can do to help limit these difficulties or hoops that people have to jump through. And hence why layers of marketplaces existing and evolving is to basically do that. And the quickest way to do that is to marry those datasets. And they’re not that complicated. You just have to do that. And both sides way, whichever way around the IP owner or the agency, whoever’s going to receive that, it’s going to be very happy if that’s broken down in constituent parts.
What do you think’s the most important thing for them to see? Is it the “Show me what this is gonna look like in your game”? Is it the thematic fit? Is it the commercials? Does it vary from licensor to licensor? What’s the most important?
It does vary. And it always has vary between all of those different examples there. You can’t deny that there are IPs that just want to know, show me the money. How much is this going to be worth? Or before even talk to you about any kind of creative, what’s the projection? What’s it going to be worth for me? Whereas there are others that are in a situation where they wants to get into some of the spaces that are now available to them. Again, it’s not like years ago, where it was you can make a CD ROM or a cartridge based game, and that’s it. Now, there’s so much possibility and the integrations are so broad. So, it is eminently possible to get opportunity based on pitch, and how good your pitch is, and why you want to do it, and then talk about the money. So, it does vary tremendously between different agents. It depends on the objectives of the licensor. He may look at — I don’t know — movie slates of things that are coming out. And then next two years, which you can often find, and you might think, “Oh, that’s interesting, maybe I could do an integration at that time for my game.” And it might be an opportunity for that movie producer to see that they can leverage their movie or attendances that the cinema or however, they’re going to distribute it by having timely integrations in particular games. So, it can vary, but fundamentally, it’s always the core five, if you wants to keep it really limited, as we’ve discussed in this call, data sets that a licensor or agent is going to want to receive. So, the love for the IP to the commercial opportunity at the other end, and everything in between.
Love for the IP. Thematic fit. How are you going to make money? What’s that money gonna look like? And what’s the fifth?
You know what? I said five. Maybe it’s four. There’ll be fifth. There’s always five. There’s always something that comes up with [unclear 23:49]. By the way, we learn it all the time, Mitch. We actually go from five down to four. We said there was some cool things. And we tried a simple [unclear 23:56] this, but at the end of the day, maybe it’s just four.
That’s right. It’ so easy, everyone.
Well, that’s what we’re here to — kind of help out and try to educate, and in comparison to other ways in which the time it can take to your cost per click marketing or other user acquisition methods or the other things we’ve discussed in this call, we have to uncomplicate this process.
Cool. I mean, one of the things we’ve kind of touched on today, I think, is the opportunity that’s there for smaller developers and publishers. And I guess you feel very strongly that at the moment, this is a great opportunity, because there’s so many brands that are looking to get into this space. I guess, does it always have to be this really top tier IP? And if no, I guess, what are some examples you’ve seen of brands, maybe that are tier one, entertainment IP or smaller brands, that have done a really good job in games? And I’ve mentioned, War of the World, but still like a pretty big IP. Are there any others you can think of that have been really successful that are a bit smaller and maybe why were they successful collaborations?
I think that most recent really good collaborations within like metaverse, Roblox, Fortnight, Minecraft, and there’s a lot of very clever integrations, certainly with the metaverse and fashion brands and music IP and what they’re doing that perhaps they wouldn’t have been able to do before. There’s one, even if it’s still not licensing, there’s some brilliant brand integrations that you probably wouldn’t have seen before. There’s some brilliant IP music and integrations, I love... I mean, it’s not that long ago that you wouldn’t have thought that Snoop Dogg could be as successful as he’s been in recent times in all manner of interactive game content. He’s not just a face on fast food advertising here in the UK. He’s got music, metaverse integration, the sound box integrations, all sorts of things. So he’s not probably one of those that is like StarWars or whatever else it might be. But he’s clever. He’s taken the core attributes of an IP. And he’s layered them into multiple opportunities in very clever ways that number one is bang on from the creative of who he is and what his characterization is. It’s bringing his identity into much wider audiences, traditionally, for someone who is getting a bit older. He’s everywhere. So the integrations that they’ve created for him as a brand, for something that might have been to some people seen as, maybe, a little bit past it or a laggard IP. They’re just on it. They’re ahead of the curve. They’re seeing where the market is moving. They’re adapting to opportunity as soon as it comes about. So that’s not a small IP, but it’s incredibly clever use of not IP...
It’s not one that I guess you would have seen in a game like 10 years ago, right? When you think about entertainment IP in games, you think of like, superhero franchises and really big entertainment IPs like films. They’re not individual characters. So, definitely, it seems to be much more attainable to get those kinds of characters into your game now than it was.
Yeah, I also think the audience accessibility to brands to doing these integrations is so much broader now. There is an opportunity that all demographics. If I go back, obviously, to when I was growing up, it was traditionally male 10-25 or whatever it might be, it was specific kind of console game opportunities. And therefore, particular types of IP that became relevant to that demographic. If we come to where we are today, it’s across all demographics, all types of integrations, the opportunities are anything from watches, fashion, weapons, decor. You can license IP into your game for a rug, if you want to. I’ve had conversations with people that want to license 60s and 70s IP for their PC World, where the individual can create their own zone within that world and they want particular old retro advertising to theme that environment, I think, they want to sell those as adult packs. It can be skewed to girls and female as much as it can be to guys to demographics or anywhere with the right game direction from pre-school, all the way up to retro horror, all the way into 80s characters. So, the opportunity based on the fact not everybody is playing computer games, but we’re almost to the point where nearly everybody apart from demographics that are certainly older than I am, may not still touch them much. But anything up to like 55 probably from five is relevant for potential IP integration across console games, mobile games, metaverse, sandbox, etc. So, you really can open your mind to the whole world of IP. If you’re a developer of any size of game, it really has to be part of your strategic outlook for user acquisition and monetization.
Yeah, it’s really interesting what are your points there is, like there’s so many different types of IP now, which I think is such a good point, if you’re a developer or publisher who can’t afford the big IPs, there’s lots of examples. I go through Sensor Tower, which is a tool for analyzing mobile games. And it gives you a lot of interesting data. And you look at some of the revenues that come from these kind of obscure — they’re not that obscure IPs, but this smaller IPs — and you think like, “Oh well, I would have never thought about integrating that IP into a game.” So I guess, one of the key things that we’ve talked about here today is like, it doesn’t have to be that talk to your IP. There’s so many opportunities. It not always going to create an AAA game using a rug, but certainly there’s opportunity.
The timing has often been one of the things that’s been very difficult to get right. And traditionally, developing content or games was a 18 month, two-year cycle. Whereas now, when it comes to an integration, you can do it pretty quickly. And there are certain IPs or certain developers that can do things quick enough to be able to hit a peak of an opportunity. So, if you have a game and there’s something that’s incredibly popular, I touched on movies on the horizon early, you can actually turn things around to become trendy. And some of those things can be popular only for a short period of time, just as much as a consumer may move on from playing a mobile game and go and play something else nomadic style, as we touched on earlier. If you can see and plan how your game integrates IP, and why it’s going to do it, how it’s going to monetize, how you promote it, How you use that as a benchmark for user acquisition, how you get live ops working on it, you can roll out different things and be ready for what’s gonna come. It doesn’t take that long now. It’s not 18 months to do an integration. You could code that and have that integrated wand approve within a couple of months. So that means that if you were really on it, you could have multiple integrations over a period of time. But once you’ve nailed it and it’s working, it just becomes a process. You have the platform, you have the process, you have the integration, you begin to understand it, it becomes a bit like a pipeline. Like, “I’ve got this one, I need something else for three months’ time, I need something for Christmas, I need something for Halloween,” or whatever it might be the most particular times of year that you want something specific, and you keep building that out. And I think that’s the future of opportunity. And that’s the opportunity for every developer of any type of level. But what I would say is 90% of opportunity does need to have a financial consideration attached to it.
Right. So obviously, very important to make sure the commercials work. I guess, being super interesting to get some of the insights today. We’d like to finish by asking one simple question. I guess, there’s many answers and you could probably talk about it for quite a while. But if you had to give one piece of advice for people who are considering licensing IP for a game who might be watching this, or even if you’re already licensing but you want to get better at it, what would that be?
I think it comes back to something I’ve said a few times on the call. There’s nothing more powerful than understanding the IP wants to license. Why you’re doing it? What that means to the game or what that means for that IP? The story of that integration, the ‘whys’ and ‘wherefores’ is very powerful. It’s not everything, but it certainly gets you to first base. It will certainly get you to a situation where many conversations open up. However, if you’ve got a lot of money and you wants to put a big check down on the table, that’s always going to wake some people up as well. But every single point of the process, the quality of the pitch, the quality of the product, the “why the integration will work” and the “how you’re going to make that work”, that’s always going to come up in a conversation, so you don’t have to spend months and months and do huge pieces of work at the front end, but just demonstrate your love and understanding of the IP that comes across massively and it will get you a long way. So that will always be my first biggest thing is story narrative, ‘why’.
And I know you’ve spoken about like show, [unclear 34:59]. So a developer or publisher, should there be illustrations of what it looks like?
I don’t necessarily think you have to go to that level, because we don’t want this to be a situation where they have to take up huge amounts of time for that. I think more often than not, these integrations and “why you would do it,” will be often related to an existing game or something that you have a new game and you have a style. Many developers will already have a look and feel for their games and the type of games they do create or wants to create. So that would already be there. So, they can obviously supply that and say, “This is the look of the direction where we see this integration happening or making a game for this IP.” So, they’ll already have that. I don’t think in this initial phase, they have to do anything specifically bespoke from a creative side. It’s more just a basic narrative of ‘why’ adding in, “This is our existing game, these are the kinds of games we work with. Here’s some screenshots of what we already do. This is what we envisage the integration potentially looking like.” So really that can be done on two sides of an A4 sheet of paper and in a few links and that’s probably it.
Okay, awesome. Well, thanks for having a chat today, Simon. Really appreciate your time.
I [unclear 36:26] my throat there at the end, but a half an hour chatting without a drink, there’s always gonna be a...
I bailed you out. I mean, you used to that right, half an hour without coming up for end in the appropriate place, but if not longer. Alright. Well, thanks for joining us today, Simon. And yeah, we really appreciate all your thoughts. Good luck, everybody. Thanks for watching the Licensing in Games Video Series. For more content like this, subscribe to our channel or check us out at layerlicensing.com.