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Licensing in Games: Issue 4

Newsletter
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The best examples of IP licensing in video games, as well as the latest news on collaborations, brand partnerships and in-game events. 

From Cardi B announcing that ‘stupid decisions from the past’ resulted in a potential ‘multi-million dollar’ deal with Call of Duty being tactically nuked, to the vice president of Activision Blizzard sharing his ambitions for the company’s latest release, Overwatch 2, to embrace Fortnite-style collaborations, here are the biggest IP stories and our favourite licensing deals from the month of September. 

Can Overwatch 2 replicate Fortnite’s success with branded collaborations?

The long-awaited sequel to Blizzard’s team-based, first-person-shooter, Overwatch, was released as a free-to-play title at the beginning of October. Given the first game sold 50 million copies with an RRP of $40 for the standard edition of the game and $60 for the cosmetic-laden legendary edition, many people are wondering how Blizzard is going to make money off Overwatch 2. 

Jon Spector, Overwatch commercial leader and vice president at Blizzard, hinted at what’s in store for Overwatch 2 in a recent interview with GameInformer when he was asked about developing sustainable revenue streams for free-to-play games. It turns out that he’s been paying a lot of attention to Epic’s battle-royale game, Fortnite. 

“We've seen some really fun examples out there of games working with other brands or other games," Spector told GameInformer. "I'm a big anime nerd myself. I think it's super cool when I see Naruto appear in Fortnite. I don't even play Fortnite, but that's awesome. And as we look at the Overwatch 2 space, those are things that we're interested in exploring.” 

Fortnite isn’t just one of the most popular and most successful free-to-play games in recent years. From branded collaborations with Marvel, NFL, Nike and Ferrari to virtual concerts with industry legends, including Travis Scott and Ariana Grande, Fortnite has become a pop culture paradise for brands looking to expand their presence in the gaming space. These collaborations are monetised through themed cosmetic items, usually new skins for characters and weapons, as well as banners, emoticons and emotes. 

While Epic doesn’t publicly disclose the financial specifics of its collaborations, we know that Fortnite brought in more than $9 billion for Epic in 2018 and 2019 according to court documents from the Apple v Epic case. Thanks to the same documents, we also know that branded collaborations are a significant contributor to Fortnite’s revenue. The game’s collaboration with the NFL introduced NFL-themed skins into the game, of which 3.3 million were sold for $15 each between November and December 2018. That’s a total value of nearly $50 million. 

The NFL collaboration isn’t even Fortnite’s biggest earner. The game’s collaborations with Marvel have brought in the most money, proving that with great power also comes great profits, but it’s worth noting that this report was created in June 2020 and there have been lots of collaborations – including new ones with Marvel – since then. Dexerto has a full list of updated Fortnite collaborations here

So, how easily can Overwatch 2 replicate the success of Fortnite’s IP plays and monetisation methods? And how well-suited is the game to branded collaborations?

The launch of Overwatch 2 may have been overshadowed by negative stories about network issues, but it still managed to reach 25 million players in just ten days. That’s almost triple the number of peak players for the original game. That’s still some way off Fortnite’s estimated monthly active users of 83 million – but it’s by no means a bad start – and Overwatch 2 has kicked things off with a bang on the marketing front through a collaboration with McDonald's

There are some significant differences between the gameplay mechanics of Overwatch 2 and Fortnite, which leaves us wondering how in-game collaborations will be activated in Overwatch 2. As a hero-based shooter with 5v5 deathmatches, victory in Overwatch 2 is often determined by the unique skills and combination of specific characters, all of which have their own background stories within the world of Overwatch. 

The skill-based gameplay mechanics of Overwatch 2 require calculated decisions when it comes to the introduction of new characters to ensure gameplay remains fair and balanced. This means we’re more likely to see themed variants of weapons and character skins appearing alongside battle passes, rather than new licensed characters being added into the game at the same frequency of Fortnite – but we wouldn't rule them out entirely. 

Overwatch 2 is planning to drop content updates every nine weeks, and Spector says he wants the company to “be in a position to sustain [content delivery] for years to come.” We wouldn’t be surprised if Overwatch 2 adds new game modes in the future, especially as it’s currently lacking a user-generated content mode at the moment. The games industry is known for pivoting and adopting; let’s not forget that Fortnite started life as a fortification survival game before it adopted a battle royale. 

Where Overwatch 2 goes from here remains to be seen. But we’ll be keeping a close eye, as always, and will keep you updated on any noteworthy branded collaborations in future issues.  

Why Disney entrusted Mickey and Friends to an indie studio

image: Disney

Cast your mind back to the beginning of the ‘90s. The console wars are in full swing, with Nintendo’s moustached plumber and Sega’s hedgehog mascot fighting to win the hearts of gamers and more space on shop shelves. But while many consider Sonic The Hedgehog to be the pinnacle of 2D platformers on the Sega Mega Drive, Disney’s Castle of Illusion starring Mickey Mouse, released a year earlier in 1990, was one of the first games to throw its hat (or rather marbles) in the ring against Mario. 

Castle of Illusion was well received by critics and gamers alike, with its success leading to three sequels – notably the co-op adventure World of Illusion starring Mickey Mouse and Donald Duck – several ports, compilations, and even a HD remake in 2013, where the franchise has laid dormant ever since. Until now, that is. 

Disney is placing the IP into the very safe hands of Dlala Studios after it announced the release of Disney Illusion Island, an all-new 1–4 player cooperative adventure platformer. That’s a great fit for Dlala, given the studio is best known for developing the brawler Overruled and rebooting Rare’s 1991 beat ‘em’ up, Battletoads, as a three-player co-op game. 

It’s worth exploring how and why an indie studio with just a handful of shipped releases under its belt managed to get its hands on a Disney IP. Conveniently, Dlala’s CEO, Aj Grand-Scrutton, shared the studio’s pitching process that led to it working with Disney in a recent Gamesindustry.biz Academy article. The full piece is worth a read, but we’ll share some of the biggest learnings below. 

It’s worth mentioning that this technically isn’t the first time Dlala has worked with a Disney IP. An unannounced title was in the works but eventually canned after Disney shut down its gaming publishing arm, Disney Interactive Studios, in 2016. Despite this, Grand Scrutton says he pitched his idea for Illusion Island in 2019. Knowing the ins and outs of the IP you want to work with is key. 

"Before pitching this to Disney, I went and I watched all the cartoons on Disney+, I read the comics, I've read the Bible-length '90-year History of Mickey Mouse.' I went back and played the old games, I went into the Disney fandom Wiki. I made sure that my passion for Mickey was supported by my knowledge of Mickey,” he tells Gamesindustry.biz 

There are plenty of other reasons why this partnership makes sense for both Disney and Dlala. 

  • While the studio hasn’t worked with any major IP outside of Battletoads, its staff have, so Grand Scrutton included this in his pitch deck for Disney Illusion. 
  • Dlala’s team of hand-drawn 2D specialists lends itself perfectly to the art style and aesthetic of this IP. 
  • Rebooting a Disney IP on console/PC makes a lot of strategic sense for Disney. Disney still has a strong presence in gaming despite the closure of Disney Interactive Studios, largely thanks to the success of its mobile games and the recent release of Disney Dreamlight Valley – but its software line-up on console and PC falls far short of the numbers it's doing on mobile. Similar to Battletoads, rebooting the Illusion IP could help engage veteran gamers familiar with the franchise while attracting new players. 
  • As a co-op adventure platformer, the release of Disney Illusion is perfectly timed and a great market fit right now. Co-op games are thriving, and two of the best-selling ones – Streets of Rage 4 and Teenage Mutant Ninja Turtles: Shredders Revenge – just so happen to be sequels for dormant IPs. 
  • Finally, this game has two clear target markets: families and retro gaming fans. The couch co-op nature of Disney Illusions is a great fit for the Nintendo Switch in particular. 

It’s worth mentioning that these are just our thoughts on why the partnership makes sense. If you’re interested in hearing more about Dlala’s work with Disney, you’ll be able to hear from Grand Scrutton himself on how they successfully pitched Disney and what it’s been like working with the IP in our next podcast. 

What do automotive companies have to gain by driving brand awareness through video games? 

Image: VentureBeat

In 1976, Nissan’s Datsun 280Z model was officially licensed for the arcade racer Datsun 280 ZZZAP, making Nissan one of the first car manufacturers to license their IP into video games. 

Car manufacturers and automotive companies have been using video games as a way to get their vehicles and products in front of new audiences ever since. Many have licensed IP into popular racing games such as F1, NASCAR, Rocket League, Gran Turismo, V-Rally and Need For Speed, or partnered with video game companies for marketing promotions and giveaways, such as Toyota’s 1998 partnership with Square Enix to incentivise pre-orders for Final Fantasy VIII by giving away a Toyota Echo. 

While there’s always been a strong relationship between video games and automotive companies, the licensing deals seemed to have revved up in the last few months. 

We’ve seen The Pokemon Company partner with BMW for a Pikachu-branded Mini Concept Aceman car, McLaren driver, Lando Norris, sitting behind the wheel in Master Chief’s helmet from Halo, artist Frankie Zombie teaming up with Motorsport Games to design custom skins, Mercedes-Benz moving its relationship with Epic Games up a gear by extending its esports commitment to 2025, and PUBG: Mobile collaborating with Dodge to let players drive its American Muscle cars in the battle royale shooter (and breathe!) 

All of that, without mentioning the mountain of licensing deals that will have been made for upcoming games such as Need For Speed Unbound, SBK 22, and WRC Generations. 

While licensing plays such as those in the games mentioned above are fairly standard, it’s reasonable to say that wider collaborations and promotions are getting more unconventional. Let’s remember that it was only as far back as June that Honda paid a presumably very large sum of money to Fortnite streamer, SypherPK, to host a three-episode sponsored live stream where he toured a custom-built Fortnite map with an absolutely massive Honda HR-V parked in the middle. 

Honda partners with SypherPK to bring the Hondaverse to Fortnite - Dot  Esports
image: Dot Esports

But as unconventional as these collaborations might be, they make a lot of sense. Car manufacturers need to move away from diesel and petrol vehicles and embrace electric. Their target market, according to consistent research, is Generation Z (born 1997–2012), with over half of 18–24-year-olds revealed to be the most likely to switch to electric vehicles. And Gen Z males are the most engaged with gaming, according to Deloitte, while highlighting the fact that game companies are focussing on attracting and retaining teen gamers. 

While game companies will use this as an opportunity to make revenue from in-app purchases – something that automotive companies can take a cut of too if they’re making IP available through the likes of Fortnite and other titles – car manufacturers will also be banking on creating brand familiarity in the hope of converting players into customers. 

We’re also starting to see gaming technology be put to good use in vehicles. BMW recently partnered with the Cloud-based AirConsole to deliver casual video games to its EV displays. A great way to keep the kids entertained, no doubt, but please don’t game and drive. 

Just like the countless high-fashion brands that have recently embraced video games and activated campaigns through gaming and metaverse platforms such as Roblox and Fortnite, esports, video games and the metaverse are the biggest growth areas for automotive companies. 

While we’re a long way of seeing a fully-imagined metaverse, Roblox and Fortnite are the biggest indicators of what idealised virtual worlds could look like – and we’re starting to see these platforms integrating drivable vehicles into their user-generated content and mini-games. 

If players are willing to spend hundreds of dollars on virtual fashion items, why wouldn’t they do the same for their own vehicles and customisable skins? 

In brief 

Here are some of our other favourite brand collaborations, licensing deals and partnerships from September:

  • Put down the controller and grab a spoon – Minecraft-flavoured ice-cream is now a thing, and it’s available in four blocky flavours.  
  • The Korea Tourism Organisation Hanoi Branch partnered with the casual social network game, Play Together, to build an in-game travel hub highlighting Korea’s best tourist destinations.
  • The Pokemon Company’s latest collaboration with French fashion house, Balmain, means players can now purchase fancy, high-fashion trainer outfits virtually and IRL.
  • Open-world survival game, LifeAfter, partnered with the manga/anime series Attack on Titan to launch over 90 collaborative items into the game. 
  • Ah, GoldenEye HD, we’ve been expecting you. Licensing quarms have apparently been resolved as the N64 classic is finally coming to Xbox and Nintendo Switch.
  • Get travelling, traveller. Explorer footwear brand, Palladium, launched two Destiny-themed footwear styles in its fourth collaboration with game developer Bungie.
  • LBC Studios announced a new rhythm game that puts you in the shoes of Bob Marley’s manager.
  • Lil Nas X’s new partnership with Riot Games will see him perform his new track, Starwalkin’, at the opening ceremony of the League of Legends WORLDS final. 
  • Blue Eyes White Sneakers – keep your eyes peeled for the launch of these Yu-Gi-Oh Addidas trainers.
  • EA Sports has opened the door to more crossovers by adding Marvel Cards and Ted Lasso face scans into Ultimate Teams. 

And in other news… 

Ready to connect your game with the world’s leading entertainment, sport, automotive, and consumer brands? 

Whether you’re a video game studio, publisher, developer or marketeer, Layer can help you find the perfect partner for your gaming project, tailored to your specific creative objectives, budget and audience. 

With partners for every major gaming platform covering all genre categories – from film and television to fashion and consumer brands – Layer’s tools and creative team makes securing the rights to these partnerships and everything that follows as simple as it needs to be. 

We’re with you every step of the way, starting with the initial matchmaking and licensing process right through to finding the best methods of integrating branded experiences into your game. 

You can get in touch by visiting our website: https://www.layerlicensing.com/ 

November 1, 2022
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