For Hollywood and content producers like Netflix and Disney+, video game intellectual property (IP) is an absolute goldmine.
Undeniably, video game adaptations have shaped our culture - from massive cartoon and movie franchises like Pokémon, or hilariously terrible live-actions like The Avatar: The Last Airbender contributing to the meme ecosystem.
The first video game adaptation, Super Mario Bros. was released as an epic failure in 1993.
Thankfully, in the early 00’s the Lara Croft: Tomb Raider and Resident Evil series smashed the box office and generated astounding figures in revenue, redeeming video game IP in the eyes of Hollywood executives.
Over the next two decades, numerous video game adaptations spawned - some resounding commercial successes (Warcraft, 2016, $439 M), and some completely missing the mark (Tekken, 2010, $1.6 M).
Today, it’s clear that video game IP is absolutely dominating content - from box-office monsters like Detective Pikachu (US$433 M) and Sonic the Hedgehog 2 (US$405 M), to critically acclaimed Netflix series like Arcane (with 3 Emmy awards), Dota: Dragon’s Blood, and Castlevania.
A New Era of Video Game Domination in Content
It’s far from a bold claim that beyond the next decade, we’ll see many more of our beloved video game characters coming to life through movies or TV series.
To borrow a term from gaming, we’re seeing see a shift in the ‘meta’ of content production.
Hollywood is in desperate need of new IP, and they're shifting their focus from traditional paper-published content IP to that of video game franchises.
Screencraft explains the backdrop where Hollywood’s obsession with making content from established IP was formed:
“The concept of pre-established content recognition in the public eye offers studio executives, marketing executives, and corporate shareholders peace of mind.
That obsession grew substantially after the one-two punch of the economic crisis and Writers Guild strike that both took place in 2007 and 2008. Multiple studio development deals that writers had for the development of original material were quickly dropped. Anything that was even a slight risk had to go. Studios have become even more risk-averse as the ripple effect of those turbulent months is still felt over a decade later.”
And the numbers don’t lie - their strategy has been proven successful.
Out of the 10 highest-grossing film franchises, 8 are based on comic books and books.
But this source material that major studios have based movies on for the past few decades is quickly falling out of fashion and familiarity with younger audiences.
While those of us that grew up in the 90s and 00s hold franchises like Die Hard, The Matrix, and Terminator close to our hearts, they mean little to the upcoming generations.
Movies based on older hit franchises, released in recent years like Charlie’s Angels and Men in Black: International (both in 2019) have flopped massively.
Gen Zs didn’t grow up reading about the adventures of Robin Hood, Tarzan, or Dumbo either, the likes of which the many movies in the past three decades were based on. Instead, they know and love the adorable Minions from Despicable Me, Among Us’ iconic crewmembers, and Fortnite’s zany characters.
Cultural atrophy is a real thing - and who can fault the newer generations for having no familiarity with something they didn’t grow up with?
It’s no wonder that Hollywood is looking at video games as a source of fresh new IP. Beyond mere familiarity, there are a number of other reasons why games lend themselves well to content.
Video games have gone from being shunned as geeky to being a foundation of mainstream pop culture. It’s become a thriving subculture, with gamers taking great pride in identifying themselves as such across online communities.
Video games also provide an immersive consumer experience. As players explore the game world and progress through the story, they become more emotionally invested in the fates of the characters and the outcomes of the story.
The global presence of video games transcends boundaries - China and Japan (the 2nd and 3rd largest box offices) for example, have little interest in American cult classics or early European folklore. Incidentally, they’re also the 1st and 3rd largest markets for video games worldwide and for the most part, exposed to the same games as the rest of the world.
It’s not just about Hollywood and Netflix anymore
We don’t just consume content from Hollywood or through streaming services these days. According to the latest Nielsen Gauge Report, YouTube has emerged as the leader in streaming watchtime on connected TVs, outpacing traditional players like Netflix and Hulu.
In his first open letter from CEO Neal Mohan to the Youtube community in March 2023, gaming-related content on YouTube generated over 2 trillion views in a single year.
As of December 2022, gaming-related content has also been responsible for driving significant engagement on the platform, bringing in more than 500 million daily active viewers who logged in and watched for over 120 billion hours.
In fact, 48% of YouTube gamers say they spend more time watching gaming videos on YouTube than playing games.
These figures speak to the immense popularity of gaming-related content, and the ability of gaming to attract a massive and engaged audience.
Content creators and indie games - a match made in heaven?
It’s pretty much common sense that only games with a massive following will be adapted into blockbuster films or digital series. After all, no studio in their right mind would invest heavy resources in making a series based on a game with less than 100,000 downloads.
But the entertainment industry landscape has evolved, and this conventional wisdom is no longer entirely accurate.
While smaller content creators may not have the financial clout to purchase the rights to Halo, a much more accessible and cost-effective option lies in the IP of indie games.
While indie games have a smaller following than mainstream titles, this niche provides a community of fans who are often deeply committed to the game, eager to engage with content that explores the characters, settings, and storylines in more depth.
By obtaining the licensing rights to create content based on indie games, creators are given a unique opportunity to tap into this highly-engaged and passionate community.
It’s a win-win situation for both creators and indie game studios. Producing great content that showcases the game and engages its playerbase meaningfully not only increases player retention but also helps to attract new players to the game. This increased exposure and visibility for their game trickles back to the content creator, in a flywheel that continuously benefits both the game studio and the creator.
Examining indie game IP Licensing from a business perspective
Why would content creators pay for an IP license when they can already simply create game-based content for free?
Simply put, it’s not just to protect their interests but also to enhance the content they put out.
Protection from other creators
Such agreements could include an exclusivity clause, which protects other creators from muscling into this niche and diluting the value of the content that the original creator has worked hard to develop.
For creators, this brings stability - building their audiences with peace of mind, knowing that their content can be successfully monetized over time.
Licensing rights also grant legitimacy to creators, funneling the entire playerbase into watching the official content they create for the game.
Note: Having a license to create official content for the game doesn’t necessarily mean that fan art and similar user-generated content are banned - in the author’s opinion, this would go entirely against the gaming spirit. The distinction is primarily in monetization - having an official license would allow the holder to monetize through merchandise, subscription fees, and other means. Additionally, while game studios may tolerate or encourage fan-made content, creators are at risk of being demonetized by the platforms themselves who don’t want to be sued.
Protection from major studios
If an indie game experiences a surge in popularity and begins to compete with AAA titles (à la Genshin Impact or Stardew Valley), major players in the entertainment industry may become very interested in obtaining the game's IP license.
This puts a target on the backs of content creators who have been developing content for the game for years, as these big studios seek to acquire the license and take over the market.
The potential rewards of investing in being the exclusive creator for an indie game can be incredibly substantial - imagine purchasing the licensing rights to an indie game like Among Us in its early days!
Access to official assets
Through a licensing agreement, creators may receive access to official assets such as game footage, sound effects, music, and other resources that they may not have been able to use before.
On top of producing high-quality content, using official assets can help creators to create a more authentic and immersive experience for viewers, compared to a not-so-accurate rendition of their own making.
Acxyn - Allowing game developers to monetize their IP at an early stage
The lack of funding is the single biggest pain point in the world of game development. While game devs have a vision to deliver to the world, they often struggle to bootstrap their games.
Art and lore is something that game devs put great effort into - and now, it’s possible for them to monetize that from an early stage.
Acxyn rewards great games on their potential, using a combination of advanced data analytics and blockchain technology. Its plug-n-play platform seamlessly connects games to Web3, automatically taking care of monetization with zero knowledge of blockchain required.
One of these means of monetization is IP tokenization, which allows game devs to raise funds even before their game becomes massively popular, channeling the money into improving the game and marketing.
Acxyn's algorithm uses data analytics to evaluate the economic momentum of games, scoring them based on their velocity and viability. This assessment reflects the actual player experience of the game, measuring how enjoyable and engaging it is.
Once the economic value of a game has been accurately assessed, a real-time index price can be assigned to the tokenized IP. This opens up a new means of liquidity for game developers - community members can purchase these tokens, allowing them to enjoy revenue share from things like future IP licensing deals.
The changing landscape of the entertainment industry presents new opportunities for smaller games to leverage their intellectual property (IP) - and Acxyn is at the forefront of making this a reality.
We hope you enjoyed reading this article! If you found this interesting, follow us on Substack, LinkedIn, and Twitter for more content. You can also find out more about us and our platform at acxyn.xyz.
If you’re a game developer interested in finding out how Acxyn can empower you to make great games without worrying about funding, drop us a message at jasonloh@acxyn.xyz or @logicxiang on Telegram.
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