Mitch: 00:04 Welcome to Layer’s Licensing and Games Podcast. Look at that grin. What a start, Rachit!
Rachit: 00:09 Everyone’s happy today.
Mitch: 00:12 My name is Mitch and this is Rachit. Hello, Rachit!
Rachit: 00:14 Hi Mitch, how are you doing? You’ve already got a siren in the background. It’s like 10 seconds in.
Mitch: 00:20 I always have a siren in the background. Welcome to London. Today, very excited to be speaking with Sasha Nikolaev, who is the Senior Licensing Manager at Wargaming, manages all the licensing in for World of Warships. Welcome Sasha.
Sasha: 00:36 Thank you, guys. Thanks for inviting me to your podcast.
Mitch: 00:41 Yeah, I’m really looking forward to getting a deeper look at the world of IP collaborations. It’s a topic that I know a lot more developers are becoming interested in, and Wargaming is one of the masters at it. So we’re going to be breaking down a couple of recent case studies today. One is Godzilla Kong, which I think you’ve done twice now in World of Warships. And then another one, which is really interesting because it’s a bit more niche, but a really good thematic fit, which is, Popeye the Sailor Man. So why don’t you just start by giving us a bit of an intro into Wargaming, World of Warships and your time at the company?
Sasha: 01:20 Of course, guys. So I will start with the company I work for. It’s Wargaming. It was established in 1998. And last year, we celebrated 25th anniversary of Wargaming. So the company has been around in the industry. The interesting fact about it is that Victor Kislyi, the co-founder of Wargaming, he started the company right after the university. So he never had any corporate job. So he became the video game developer from the get-go and has been at the company all this time. So in 2009, Wargaming released World of Tanks. And World of Tanks became a global phenomenon. It had a global success. And it was a free-to-play title with AAA quality, very high fidelity graphics, very interesting gameplay. And back in those years, it was not very common. So we were basically disrupting the market. And the company was at that time based in Europe. So we quickly became very big fish in the European free-to-play industry. So after 2009, Wargaming also released World of Warships in 2015. So World of Warships became the second big title of the company. And then since that time, Wargaming has grown significantly. At the biggest, it was more than 5,000 employees with offices all around the world. And now it actually is much smaller. So right now, Wargaming is approximately 3,000 employees. That’s because of the war. And we had to move a lot of operations from CIS region, from regions affected by the war, impacted through different ways. So now we are down to 3,000 employees. But we still have a lot of studios. Our key studios are in Vilnius, Lithuania, in Belgrade, Serbia, in Chicago, United States, in Berlin. And maybe I’m missing something. Yeah, and we have a Guildford studio in the United Kingdom working on an announced title. So that’s a little bit about Wargaming. About myself, I joined the company in 2015. And from the beginning, I was in the United States. And I worked on World of Warships. It was a very good timing for me to join, because World of Warships just came out of closed beta. And it was at the beginning of its journey. And it was also an interesting operational challenge and organizational challenge for the company: How to become a multi-product company from just a company of one successful product? So I’ve been through the whole process of building operations for World of Warships publishing on a regional level first. And then in 2017, I was promoted to become a regional publishing director. So I started running the local publishing team. I was defining regional strategies and was responsible for business performance in North American region. We globalized a lot of best practices that proved to be working in the region. They became global standard. And then in 2020, approximately, I shifted my focus and I started driving business growth of the company, not through building processes and publishing tactics, but through IP licensing deals. And doing such partnership that helps to increase our revenue, increase our number of players, or help with some other objectives. So here I am.
Rachit: 06:33 Awesome! Glad to have you here. And I think you started to answer a question I was just about to ask. It’s a fascinating journey. You had one hit game and then you’ve managed to replicate it again right away with World of Warships, and seemingly something else on the horizon, which is unannounced. But you just said, you started focusing on business growth through IP partnerships. I think big fans and the market knows that World of Warships has done a lot of IP collabs compared to a lot of publishers and developers and games out there. How does IP fit into the overall growth strategy for you? And why does it work? Or what metrics are you trying to affect? Is it engagement for existing players? Are you bringing people in? What have you found works for you? And how does that tie back to your business growth, which ultimately you mentioned is the reason for it?
Sasha: 07:25 Definitely. Actually, there is no one single reason for doing IP collaborations. And for now, I’m just talking about integrating external third-party IPs into World of Warships, but I’m also now working on the other way around about licensing World of Warships IP to other licensed products. So when we think about IP integrations into World of Warships, our primary objectives sometimes are to increase revenue of the product. And it’s also not very obvious. So, of course, we have our core military history setting that appeals to our target audience. But at the same time, our target audience is super loyal. So they play this game for years. So still, a big overwhelming majority of players in our game, they started playing back in 2015-2016. So for those people, the game is like a lifestyle. It’s like a lifestyle. It’s their hobby. And as a hobbyist, people also care about other things. They want to express themselves. They want to show affinities for third-party intellectual properties. They want to consume the content in this setting of naval combat simulator. So we diversify our offerings. We offer both our core military history content and we offer also third-party IP content brought into military combat simulator context. So this is first. Second, we also care about bringing new players to our game. And we discovered that actually this approach works. So there are a lot of fans of various intellectual properties who sometimes fantasize actually about experiencing this IP in such context. And sometimes it just clicks. And those fans, they come to our game, they fulfill the fantasy, and they stick around and also continue playing in our core military setting and enjoying other collaborations. And finally, sometimes it’s just important for us to collaborate with certain intellectual properties for branding purposes. So sometimes we just want to deliver certain messages to the target audience about our brand. We want them to perceive us differently. And this is where IP collaborations help.
Mitch: 10:47 Yeah, it’s really interesting because, as you mentioned, players fantasizing about interacting with that IP in the setting of World of Warships. I think that’s becoming far more common where people are breaking these rules of “We can’t integrate an IP into a game that doesn’t really fit thematically.” It’s like, “Well, if the players want it and they really love that IP, then you’ll find a way of making it work.” And I’m always fascinated to hear from developers, publishers we work with, of how they actually evaluate an IP? Because like I said, you’re working with everything from a new movie that’s coming out that might somatically make sense to something that’s very niche. So what’s your process then for evaluating an IP? How do you work through that? Where does it start? Who are the teams involved? And how do you evaluate that? What you’re actually going to work with and prioritize?
Sasha: 11:46 So I actually approach from two sides at the same time. So one side is the request that I receive from my product stakeholders who communicate to me what they actually are looking for. Like, we want to grow revenues through sci-fi setting or we want to grow revenues through some zombie setting of whatever, or we want to become closer to our North American market and collaborate with certain IPs that demonstrates shared values with the certain IP. So that’s the first side. And I always on a lookout for the IPs that are good fit for the task that I’m having. And the second approach is, I always try to keep tabs on the industry. Because sometimes our stakeholders, they just have blind spots and they don’t realize that there is a unique opportunity. But this opportunity, you don’t know if you don’t go to industry events, if you don’t connect with the IP owners, if you don’t chat with them about their priorities, about their interest, and you don’t educate them about our game if you don’t tell them how we can actually collaborate together. So some collaborations that we executed, they actually came from the second approach. Well, it’s-- When I went out, did the networking, met very interesting partners, and those partners told me that they believe in a good synergy effect from such collaboration. And I presented this concept to our stakeholders. And they found it reasonable. They found it very attractive. So we made things happen. So I go from both approaches. And, of course, not all IPs are equal. Some IPs have a very broad appeal and they have appeal across generations, across geographies. So very strong, valuable properties. And not always that means higher cost. Of course, there is a correlation, but sometimes you will be surprised. On the other side, you also have very niche IPs that either appeal to a very laser focused segment that is interesting for us, or that are relevant to certain geography that we are going after. So, for example, we can have a specific target for our marketing team that needs to penetrate certain markets within the short time frame and they want to maximize their effectiveness, they want to recruit some IP that is relevant for this market and make it happen. So these are several approaches that we use to evaluate the IP. So we utilize all of them. And also, sometimes, there is a subjective element that is not purely about business, but it’s about inspiring the team that needs to work on, because it’s very important. Like I mentioned that our players play the game for like five years or six years or seven years, but we also have a development team working on World of Warships for more than 10 years, I would say more than 10 years, because the game has been in development for a long time. Then it was finally released. And now they are maintaining this live operation model. And for 10 years plus, people are working and working and working on military history setting and they also have affinities to certain IPs. And the opportunity for them to work on such IP integration projects is actually super inspirational and helps to overcome burnout.
Mitch: 16:46 We spoke to a developer the other day, actually, and was recommending some IPs. I listed a few, and he was like, “Yes, the studio really loves that one, and they will get really excited about that one, and we’ll be able to produce really good work.” But that one, we could probably make work if we had to. It makes sense, but that one gets them excited. I get what you’re saying. Just quickly, it sounds it’s not for you purely quantitative the way that you evaluate IPs. Some developers, publishers we speak to are very like, “We run surveys with our players. We need heaps of data. We want to model out the potential effects of an IP on our player base for this particular metric.” But it sounds like for you, sometimes it’s just as simple as running into an IP owner and seeing that there’s a good alignment there. Is the quantitative approach still important for you, or is it really just qualitatively feeling your way through something?
Sasha: 17:48 Yeah, so don’t get me wrong. Maybe I made the wrong impression, but we also employ quantitative methods in our decision making. So we have a very robust team of data analysts who are always looking, monitoring, tracking data about our players. We do surveys for our player base to identify their hobbies, their interests. So, for example, we know that the majority of our players are big fans of heavy metal music. That’s why we do some heavy metal music and band integrations in our game.
Mitch: 18:38 Which are awesome by the way, but yes.
Sasha: 18:40 Yeah, thank you. So we do that. We also do some testing/test on performance advertising side. So our marketing team that makes some certain creatives and runs them through banner networks to see how it affects metrics. So it can help us understand what are the reasons for improved performance metrics, and that doesn’t make sense to continue investing efforts into this direction, and recruit certain IP. So yeah, we also use quantitative methods as well. So it’s not completely a qualitative, but at the same time, it’s not trying to come up with number 42. “Okay, number 42? We do it! Number 43? We don’t do it.
Mitch: 19:46 Right! You can’t boil it down to a single number, it’s impossible. Well, one thing I’ve noticed about your collaborations, they’re always supported really well by brand marketing. It’s not just UA. You always produce these really beautiful trailers that go up on YouTube that show off the collaboration. I notice you try to get placements in the press about collaborations. It’s not just, “Hey, we really want to acquire users through typical UA channels.” How much of a factor then is brand affinity for that brand or the size of that brand? Is that really important to you? It’s not really a big consideration, you just like doing the brand marketing anyway?
Sasha: 20:35 Yeah, so it’s very important. It eventually stems from the objective that we are trying to achieve. “Okay, we want to communicate certain brand message, we also want to promote the collaboration and make sure that both potential players notice it and get excited and our existing players and even our lapsed players who haven’t played the game for a while notice it and jump back to check it out and re-engage with the game.” So I’m glad that you noticed that because a lot of effort goes into conceptual ideation to achieve this desired effect for the collaboration to get noticed and be — how to say — spark engagement, discussions. And also there is a lot of effort that goes into aligning with IP owners on all these creative approaches because sometimes there are limitations that are coming from them and we need to respect those limitations because we don’t want to upset both World of Warships fans, we don’t want to upset IP fans. So as I said, there is a lot of efforts. So one example was with heavy metal that we briefly touched in a previous question. Like, with Megadeth, we have done the research of our audience. We know that they love heavy metal as a music genre. We have a lot of heavy metal in our game. So we collaborated with Megadeth band. We integrated Vic Rattlehead as the band’s mascot. And for the first time in band’s history, we gave him the voice. So in the game he was integrated with a voice pack and this was actually a very unique messaging and unique value proposal for Megadeth fans. We told them, “Hey guys, you love heavy metal. We have a lot of heavy metal in our game and guess what, we also have the voice pack of Vic Rattlehead and you have never heard him speaking, check it out.”
Rachit: 23:17 That’s super cool. I think it’s almost extending the IP in a way that only you can do is something that it’s not only just for your players, but it’s for the IP fans as well. You can really honor them. As you said, your players have an IP fantasy that they want to see in the game and with their play style, but if you can think about the IP fans and what might they want to see and what can we offer them that they haven’t been able to get anywhere else, that’s really, really interesting. I know we promised earlier, so I want to jump into a couple of collabs that you’ve done that Mitch mentioned earlier. I think Godzilla and Kong has happened a couple times now potentially, so I’m guessing it’s worked. I’d love to understand how did it come about? How did you approach it and why did you pick it? I think I saw Godzilla Kong, the first one. I think there was actually a ship involved at some point, so thematically made me make sense, but I’d love to get your take on how it happened and how you made the decision.
Sasha: 24:24 Yeah, so it’s actually a great collaboration and great case study for us internally with Legendary Entertainment. We’ve met with this partner on Licensing Expo in Vegas in 2019. So in 2019 we connected and Legendary was actually at the very initial stage of building their licensing program. So at that point they were super humble, super easy to work with, very open-minded guys. I had a lot of pleasure working with this partner. So we connected with them, we presented our game, we presented our setting, we communicated how big this game is globally and there was already a business alignment that they are releasing this title globally. We are a global game and the partner just told us about this as a secret: “Hey guys, actually the next title that is coming up, there will be Warships in it.” And we saw that movie trailer with Godzilla and Kong fighting on the deck of aircraft carrier first when it was still under NDA. So it was a privilege and actually the result of such proactive outreach to the partner, proactive relationship building and sharing the information, educating them about us. So that’s how we entertained this idea about working together. And we also saw great opportunities that we can promote the movie to our core audience of naval enthusiasts. So that was actually the main objective of this collaboration to ensure the commercial success of the movie while, of course, not damaging anything and making sure that our players actually enjoy the collaboration. So we also wanted to make it interesting and that’s how we came up with this concept of putting big huge monsters on the deck of warships from our game and creating commanders with voice packs, creating those three 3D schemes and promoting this collaboration to our existing players. However, we did not expect-- Well, of course, that was our main focus, but we did not expect that it will also have so much benefit for us. It was an unexpected and surprising effect. We received a huge amount of new players who actually came to World of Warships and they got inspired by this opportunity to actually play this gameplay when you can have both monsters, both titans driving warships and shooting at each other with 16-inch guns.
Rachit: 28:18 It’s very cool. I think we, on previous episodes, spoke about fulfilling the core fantasy, and I guess you know why you have. Obviously, in the movie, they fight each other hand-to-hand or claw-to-claw, but in your case, I guess, you’ve given, you still fulfill that core fantasy, but done in a way that it’s kind of your game in the environment that your players are used to. You mentioned that the commander model is something that works, and we’ve seen that with a couple of collabs for you. What other integration types have worked for you? Is it commanders’ voice facts? Any other types of content in the games that you can do?
Sasha: 29:04 Of course! In that regard, Godzilla vs. Kong was not a very unique collaboration in terms of framework, in terms of scope of content that we produce. We generally follow the same approach established previously. Our first IP integration in World of Warships was in 2016 with Anime Series Arpeggio of Blue Steel, Ars Nova. That one was the first. And that’s where we actually first introduced commanders with voice packs. We introduced skins to existing warship models. We introduced flags. And later we started also integrating IP elements into other contents, such as patches, containers. Sometimes we integrate IP into the port, so the lobby basically between the battles, where players hang out and change the load out of the warship. If I’m not mistaken, there was one president when we actually integrated the IP elements into the playable location, where players actually participate in a battle. It was with the movie Dunker.
Rachit: 30:41 Okay. That makes sense, because thematically or from a setting perspective, you can use dumb curve. It really own that. How does it--? Well, actually, maybe let’s use this to flip into another integration that you’ve done, which is Popeye. I think there it’s different. Because I guess with Godzilla and Kong, it was timed around all kind of in the lead up or around the hype of a new movie coming out. What was the reason behind Popeye? Obviously, thematically, it makes a lot of sense. It’s sailor, it’s iconic in that sense, but not a lot of content or not as much content in production. Why do it? What was the reason behind it? And then also how did your players react? And what were the results different compared to what you said around Godzilla and Kong?
Sasha: 31:35 Sounds good. Yeah, that’s a great question. I can say that we’ve met with King Features, the IP owner of Popeye, at the same time, when we met with Legendary. It was 2019. But we only executed this project in 2023. So four years have passed, but we were connected. Popeye was on our radar. It was one of those properties that we wanted at some point to utilize in order to reinforce our positioning as the biggest video gaming naval franchise. And in 2023, there was actually a very specific idea that became a good fit for such collaboration to happen. So we actually organized a branding campaign that had actually a charitable component. So we partnered with both King Features on Popeye IP licensing deal. And we partnered with Force Blue, which is a non-profit founded and operated by veteran Marine, Rudy Reyes — very charismatic Marine veteran. So we had a lot of pleasure exploring this collaboration opportunity with them. So this is a charity that helped with ocean conservation efforts. So their main purpose is ocean conservation efforts and mental health support for military veterans. So both are very good causes, very aligned with what we do, very aligned with the values for our target audience. And just full disclaimer for us professionals, sometimes there is a controversy about doing charity when you’re a pro-for-profit. But I’m totally not shy about this. I think that doing charities when you’re a for-profit, it’s still a good cause, because this is coming from the right place. It’s a genuine. It’s not only about corporate greed or something like that. So we believed in this cause and we took this risk and it paid off. It paid off because it helped to deliver this message effectively. We brought the character that is iconic for a lot of our players and a lot of other naval enthusiasts who are not our players. It has a lot of nostalgia value as an icon of World War II era propaganda. So the guy who is about doing good things. So we utilized, in Kim, to produce licensed content and we distributed this content. A lot of this content was distributed for free. Some content was sold, but it was benefiting the charity and we also donated 50K. So 50K was donated from Wargaming, like donation matching effort. And we received a lot of positive sentiment from our player base. Players loved it. We received very good coverage from press. So it was appreciated by the industry experts covering video games. And it was also noticed and picked up not only by video game experts, but by journalists from covering other industries. So that’s why we believe it was a great success because we effectively achieved what we wanted to do. And while a lot of our players, they had absolutely no negative sentiment about Popeye collaboration. So they said, “Why didn’t you guys do it earlier? Why didn’t you do it before?” It was so obvious!
Mitch: 36:43 It is so obvious, but it’s interesting that it got picked up so widely even by other industry press, but I think that just goes to show that IP collaborations are not always a math equation. It’s not always done for UA or for a revenue bump. In this case, you’re actually doing this for social responsibility, for brand marketing. It’s really interesting that this isn’t a very calculated collaboration. You’re doing it for good. So, really cool to see. One thing that I noticed that doesn’t get spoken about a lot is how these IP collaborations monetize. And it’s this thing that gets hidden behind the curtain and the dark arts. No one really wants to talk about it. There seems to be two common ways of doing it. One is that you sell cosmetics, skins, or something that players can purchase in game. Or you tie license content to a battle pass or something that players purchase, and then they can unlock that content and own the thing that they unlock. Some games seem to do both. How do you approach that? Because it seems as though you do both as well. But you do a lot of cosmetics. How do you approach that, one? And then how did you decide on which is the best way to go for which collaboration, like which strategy you use for different collaborations.
Sasha: 38:21 Yeah, so I would say our dominating method is to produce licensed cosmetics and sell those licensed cosmetics via microtransactions. Just another reminder. All our games, Wargaming titles are free-to-play titles, so they are monetized through microtransactions since 2009. We were one of the first. We were in this business before Fortnite, before Call of Duty switched to free-to-play business model, and so on. So that’s our core business competence. Our games are monetized in general through boosters, allowing players to grind through premium content. We sell cosmetics and premium ships. So in case of collaborations, we either produce premium ships or we produce cosmetics that customize your existing ships and offer those to players. Battle Pass, that’s also sometimes utilized more recently. So we do all of that and we have a standalone team of data analysts who constantly track, monitor, analyze how all of these different approaches perform. So we receive the feedback about should we do more premium distribution by distributing those licensed items via bonus codes or rewards for playing missions without any pay gate. So we make these decisions, we analyze how did it work, and we decide how to approach next time. So I don’t think I can easily explain what’s the outcome, what’s the detailed approach. It’s always case by case.
Mitch: 40:51 And logically, for a game that’s about warships, cosmetics, decorating your ship or having your commander, that’s just what makes sense. So you don’t need to overcomplicate it.
Rachit: 41:08 Yeah, it’s cool you’ve got a range of internal resources to look at that, whether that’s your data team. And I think one thing you also mentioned is when you’re outside of monetization, when you’re considering IP, there’s this blend of a qualitative and quant approach. And it seems almost that even your qualitative approach, given how much you’ve done now, you’ve probably built that qualitative muscle up with quantitative backing. By the time you look at an IP, you’re like, “Are you internally like--? Our players like metal. I could go get the data.” But really, we already know a lot of what will work because we built this up. So I guess the last question on my end is, as someone that’s done a lot here, what do you wish you knew right at the start? Thinking about our developers and publishers that haven’t done a lot of IP licensing, what’s your top tips around working with IP, getting into this? And what takeaways do you want people to keep in mind?
Sasha: 42:13 Yeah. So, as I said, I built the bridges between IP owners and World of Warships. So it really helped me to be successful in that by engaging with partners and with properties themselves that are on the radar. So on all stages, whenever we just start thinking about what do we want to do next, do we want to do some partnership in zombie setting or do we want to do some partnership in pirate setting — I’m just taking random examples — and I start searching for those IPs that could work and I start engaging with them. I start subscribing to community groups. I start actually consuming the content. So it really helps me. Even if I cannot do it all by myself, I can always recruit volunteers who are already IP experts who can just give me a quick educational session about the IP and can hook me up with the best knowledge about it and also share some emotions. So it always is very helpful. So that’s the first advice I would give: To go and consume the IP that you’re considering and engage in conversations with communities. It really helps. Second is the following. So always keep in mind the risks. So, for example, working with Hollywood, you can always expect things go south, the production can get delayed or theatrical release gets rescheduled and old marketing campaigns get rescheduled. So that happens. Always have a mitigation plan for such scenarios and be prepared for the worst case. And finally, I would say patience. Patience is super important. As I said, there are cases when you can start entertaining the idea of an IP collaboration in year one, and then you will execute it in year five, year six down the road. So it doesn’t happen overnight. So you need to be prepared for a marathon, not a sprint. When you’re in this business of IP licensing, it may take years, because just sometimes the timing is not right. Sometimes, on both ends, strategies change, circumstances change or priorities change. And at some point, all of a sudden, it can just become a perfect storm and everything is aligned, all stars aligned, and you just decide, “Okay, what’s good now? Why not? Why did we wait so long?” But there is an explanation why did we wait for so long. But my point is, you just need to be patient. You need to be patient and keep these partners, and both these partners and this product or stakeholders that you are working for, keep reminding about yourself, keep reminding about existing opportunities, keep educating, finding new angles for a collaboration, for new reasons to do the collaboration. And eventually, it will happen.
Mitch: 46:30 I think the big takeaway for me there is just time in market, like spending the time with immersing yourself in content and talking to IP owners and make sure you have a lot in the pipeline, which is the second point is mitigate the risk, and then third is be patient and then these things just can spontaneously happen sometimes and that’s not luck. That’s the result of time in market and a lot of planning. So really good advice. So to end then during collaboration, if you had to pick one IP to collaborate with and World of Warships tomorrow, who would it be? And maybe they’re listening.
Sasha: 47:17 So I will answer subjectively based on my personal biases and my personal preferences. So it’s not my answer as the professional in the role, but it’s just my opinions.
Mitch: 47:38 Yours only.
Sasha: 47:39 Okay, so I will answer it with a quote, “Battlecruiser operational”. So it’s StarCraft. StarCraft is one of my favorite titles from old times. And I see a lot of creative field this World of Warships. So that would be my dream IP integration project.
Mitch: 48:06 So, who won in StarCraft, is it Blizzard?
Sasha: 48:09 Yeah, Blizzard then now it’s actually Microsoft.
Mitch: 48:12 Yeah, Microsoft. Well, good luck with that.
Rachit: 48:15 Mitch, get on the phone. You’ve got a few calls to make.
Mitch: 48:19 I’ll call Satya right now and get that one for you. And just to end, so the title that’s in development that’s a secret, surely it’s World of Warplanes, right?
Sasha: 48:36 This was released in 2013, I forgot to mention, we’ve already done all the plans.
Rachit: 48:46 Maybe next year, I don’t know when it’s coming out, but whenever it’s out, we can do a recap and revisit what collides you’ve done there.
Sasha: 48:47 Of course, we can do it.
Mitch: 48:55 Thanks so much for coming on, Sasha. It was a pleasure speaking with you.
Sasha: 49:00 Definitely. Thanks for inviting me. Thanks for having me. I hope you guys enjoyed this conversation.
Rachit: 49:06 That’s great. Thanks Sasha.
Mitch: 49:09 Thanks for watching the Licensing and Games video series. For more content like this, subscribe to our channel or check us out at layerlicensing.com.