Issue #
Regionalised IP integrations and Fallout’s $100m licensing boost

A monthly look at the best examples of IP licensing in video games and the latest news on collaborations, brand partnerships and in-game events. 

Are regionalized IP integrations the most effective way for game studios to launch in new markets? We turn to the highest-grossing mobile game in the world, Honor of Kings, for the answer. Tencent’s MOBA game launched as a Chinese exclusive, but is steadily winning the hearts of players across the globe through regionalized IP integrations as it expands into new markets such as LATAM and MENA. We highlight how external IP integrations can make games more appealing to specific markets. 

Elsewhere, we reflect on the extraordinary launch of Amazon’s Fallout TV series by valuing its associated licensing activity and the revenue it generated for Microsoft by boosting sales of Fallout video games. This might be the biggest transmedia triumph we’ve seen yet, and there are some clear lessons for both licensors and game studios when it comes to capitalizing on transmedia activity. 

You can find both of these stories below, along with the latest news at the intersection of video games and licensing. 

How regionalized IP integrations are helping game studios enter new markets

Tencent’s Honor of Kings is the most popular Multiplayer Online Battle Arena (MOBA) game on mobile in the world, which is pretty remarkable when you consider the game has spent most of its nine-year lifespan as a Chinese exclusive. But after spending so much time at the top of the charts in China where more than 10 million daily active users generate over $140 million every month, Tencent is slowly expanding with a global launch. 

The big question now is whether Tencent can replicate the success of Honor of Kings in other competitive markets. That won’t be easy. Honor of Kings is popular in China because its heavily regionalized and appeals to Chinese players. Its gameplay and themes are relevant because the characters in the game are based on Chinese historical and mythical figures such as Ghengis Khan, Li Bai and Monkey King. 

Taking these Chinese characters and gameplay themes and making them appealing to players outside of China will be difficult. Thankfully for Tencent, it has a very specific strategy to help it win over new gaming audiences: regionalized IP integrations and partnerships. 

When Honor of Kings launched in Brazil—its first country outside of China—it became Brazil’s most successful free mobile game after picking up two million pre-registrations. This is partly down to the immense effort that Tencent put into ensuring the game was properly localized (popular Brazilian voice actors known for iconic character dubs in anime voice the game’s heroes) but also the success of its regionalized IP integrations and partnerships. 

Like many of the most popular mobile games, Honor of Kings integrates external IPs into the game for limited-time events, cosmetic items and marketing campaigns. To support the game’s launch in Brazil, Tencent teamed up with Brazilian EDM DJ Alok, who recorded a remix of the theme song ‘Ready Set Go’ for Honor of Kings and also made an appearance in an in-game event. 

With more than 24 million monthly listeners and six billion streams, Alok is one of the biggest EDM DJs in the world, but 35% of his audience are from Brazil, according to Chartmetric data. This collaboration, which also introduced special Alok cosmetic items, exclusive Alok missions for Brazilian players and a special recorded video for fans, made Honor Of Kings more appealing for Brazilian fans while playing a significant role in launching Tencent’s Brazilian Honor of Kings social platforms by providing them with regionalized content. 

Tencent will likely utilize similar strategies as it prepares for the global launch of Honor of Kings. A recent opinion editorial in the marketing/PR publication Campaign Middle East by Joe Zoghbi, Senior Game Operations Manager at Tencent Games Global, highlights the importance of luxury collaborations as the studio aims to capture the attention of gamers in the Middle East. 

Similarly, a recent interview in PocketTactics with key staff at Tencent Games Global reveals that plenty of in-game events and collaborations are lined up to support the game’s launch into new markets. We wouldn’t be surprised to see regionalized IP integrations similar to the Alok collab as part of these events, especially due to the revenue they can generate too. 

While regionalized IP integrations are a great way to bring in new players and support launches into new markets, they can also generate massive revenues in the regions you’re already popular. 

As an example, the 2023 Hello Kitty event (August 22-September 6) in Honor of Kings is one of the game’s biggest months on record, bringing in more than $238 million in August which was bolstered with the launch of Hello Kitty-themed skins on August 22. According to DAO Insights, the Honor of Kings x Hello Kitty topic was viewed over 140 million times and generated close to 8000 original posts.

There are lessons here for both video game studios and licensors. If you’re a video game studio and are looking to generate new revenue streams and downloads in a specific market (or launch a regionalized version of your game there), look to the IPs that are popular in that market and consider what can be done from a LiveOps perspective. 

For licensors, be mindful of the markets where your IP and products are most popular. If they align with gaming audiences, research the video games that are popular in those regions and think about what could be done from a partnership perspective. 

Behind the numbers: Microsoft’s $100m revenue boost from Fallout

Taking a popular video game IP and adapting it for a film or TV series doesn’t guarantee a hit. There are plenty of examples of video game adaptations that have failed to impress fans and the box office, from House of the Dead and Far Cry to DOOM and Alone in the Dark, but Amazon’s adaptation of the RPG series Fallout has been praised by fans and critics alike, while creating plenty of new revenue streams for Bethesda and parent company Microsoft Gaming. 

It’s widely reported that the success of the Fallout TV series caused a significant uptick in game downloads for the older Fallout games, but not much has been said about the financial implications of this uptick and the value associated with the wider licensing activities around the Fallout IP. 

The only thing we could find was this piece by VGInsights which estimated a $80m revenue uplift to Bethesda through Amazon’s licensing fee, game sales for Fallout 4 and Fallout 76, and in-game purchases through Fallout 76. 

VGInsights didn’t include data for Bethesda’s mobile game Fallout Shelter or other games in the Fallout series such as Fallout New Vegas and Fallout 3. So, we decided to plug this data gap by piecing together our own data points and findings alongside an estimate for revenue uplift from Fallout merchandise. 

You can read the full in-depth piece here in our Fallout Licensing S.P.E.C.I.A.L, but we’ve included some of the key findings below: 

  • We estimate the total value of Fallout’s licensing activity and game sales between Apr 9–May 10 to be worth more than $100m 
  • We estimate upcoming integrations in Fortnite and Call of Duty will generate $3m of that. We’ve based this estimate on leaked sales figures for the NFL skins and 1% of COD’s player base buying the Operator Bundle.  
  • We estimate the sold-out Fallout S.P.E.C.I.A.L. Anthology generated $1.2m in sales working off 20,000 units manufactured. With the exception of the plastic nuke (a reprint of the Fallout 4 version), this edition of the game won’t have cost much to manufacture in comparison to typical deluxe or collector’s editions, which can typically generate between 5-15% of total unit sales.
  • We estimate the total uplift in sales of Fallout games (Apr 9–May 10) to be around $70m. This figure was reached by using SteamSpy to analyze Steam sales, combining it with SensorTower data for Fallout Shelter and estimated PlayStation/Xbox sales based on the Circana monthly sales chart for April. 
  • Fallout 4 generated $34.6m in Steam Sales (Apr 9–May 10)
  • Fallout 3 generated $300k in Steam Sales (Apr 9–May 10)
  • Fallout 3 GOTY Edition generated $1.05m in Steam Sales (Apr 9–May 10)
  • Fallout New Vegas generated $13.17m in Steam Sales (Apr 9–May 10)
  • Fallout 76 generated $8.06m in Steam Sales (Apr 9–May 10)
  • Fallout Shelter generated $5.93m on mobile devices (Apr 9–10)

In brief 

And in other news…