The Impact of Entertainment IP in Gaming: Insights from Industry Experts

i got the world's three greatest experts to discuss entertainment ip in games these guys have worked at marvel disney

nbc universal epic warner brothers and many more today we discuss and quite possibly

the most in-depth discussion on ip in games ever recorded we discuss the impact of ip on games common big

problems and issues exclusivity deal terms and structure you're definitely going to want to listen to that one

license has gone wrong ip versus integrations and so much more you're not going to want to miss

this episode if you want to know anything about entertainment ip and games taking you over there

right now i thought we could start by just having you guys talk a little bit about

your background especially your experience in ip given just how impressive your

backgrounds are and maybe starting with you aims yeah sure uh i'm ames kirshan i'm currently uh the vp

gm in studio creative director of a new studio under hasbro and wizards of the coast called atomic arcade

and we are in early days of building our our team and our first game is going to be a triple-a accident adventure game

focused on the gi joe ip and it's going to be based around snake eye so we're really excited

about that um yes really excited about it um my background i started in the industry

in 2000 uh for warner brothers on the licensing side so at the time warner brothers was not a

fully integrated publisher they were licensing their ips to various uh publishers so

i was in charge of uh overseeing any dc games that were being done by external develop publishers at

the time so we had partnerships with atari and for grounds at the time and ubisoft had the batman license midway

had justice league so i would oversee those so i cut my teeth doing that then i moved over and

ran games for marvel for four years and that was a similar situation where marvels were marvel was in a licensing

situation so all of their games were being done by external publishers activision was a big partner at the time

um doing the spider-man games fantastic four x-men

games uh and this was mainly in the ps2 era and early ps3 era and then ultimately uh i i wound up

wanting to go over to the publishing side and produce games directly based on my experience on the licensing side so

uh i had gotten in with a uh a startup publisher called brash um that was a

funded uh publisher that was working with external developers and their whole business model was to be working on

big hollywood ips uh so uh and i knew some of the principles

there and they were partially uh seated and partnered with warner

brothers at the time so for ips but also warner brothers was testing the waters on distributing games

at the time so they were a minority investor in brash and they also were their distributor on the north american

side and also seeded them with ips as part of that so lo and behold i was back in the dc

universe there because they had two projects with dcip's the flash and superman

um so there's you know a lot of youtube videos about those projects that never came to fruition because we were in full

production on those those were a lot of fun but then ultimately during that period

the financial crisis happened the company did not get their second round of funding

they had made some really poor decisions on some initial projects and investments they had made

and the company kind of opened and closed their doors in 18 months so i saw them kind of i was one of the first

people to come in the door and one of the saw them close their door 18 months later

but it was you know the stars aligned because at that time that's when warner brothers did go officially vertical and

built their own warner brothers games publishing and development infrastructure

so they brought me aboard uh to be ep over their dc portfolio of games that they would develop and publish

themselves uh eventually made it to vp of production and oversaw all of the

portfolio of dc games on the production and creative side up until the point where i joined hasbro

at the beginning of 2021. hi i'm ed zobrist i've been in the interactive industry for about 25 years

and that includes places like disney interactive so i know my way around games and around

entertainment ip uh both as a licensed door and a licensee

although i'm now retired i my last position was uh spending five years in epic games as the head of

publishing and at epic publishing includes marketing so in that capacity my team

launched fortnight and i personally worked on on most of the big

ip uh integrations that fortnight did that there were some of which got pretty well known pretty famous

um oh i want to give one shout out though a lot of the early deals we did at fortnight were uh done in conjunction

with uh mark drain who said a lot of the strategy for how the deals we did with uh entertainment studios and fortnite

worked out and they ended up applying them to a lot of the future deals we did i do want to give also one other

disclaimer if anyone is hoping to hear me give confidential info or dirt on epic or fortnight that's not going to

happen um obviously i want epic to continue to succeed and tim sweeney who's not just a

really smart guy he's also very good to me but also i want to point out since i've

spent 25 years in the industry it means i've worked on way more ip games outside of epic than i did while i

was epic so a lot of what i talk about today will probably not apply to fortnite

yeah so i started out in the business uh not in games but at espn and i was working at espn in one of the

earlier baseball strikes they had asked me if i was working on mlb tonight and baseball

mlb remote operations and baseball tonight and then the players went on strike

in 94 and i i left espn because they asked me to do america's cup yachting

um and while the idea of going to san diego and sitting on the docks and covering america's cupboarding was great

they told me it was going to be in the basement in bristol connecticut and bristol connecticut is i'm sure it's a

lovely city but kind of a pit as well uh but that was when i was i went home after

that i was like i don't really want to go do america's cup yachting and my we're sitting around playing sega

genesis and my buddies are like well why don't you go make games you sit here and scream at the

scream at the games all the sports games we're playing about they got this wrong and that's wrong and that player is a

righty and he's you know throwing lefty and so like why don't you go do that and i had no idea i'd never thought about

you know games as a career i set my resume to two companies acclaim entertainment and electronic arts and i

claim call me back like this was snail mail called me back like three days later

which is practically overnight and said can you come down for an interview we're doing a you know we're doing a

baseball game and we you know we're pretty big in the sports genre with them nba jam

and i walked in the door at a claim they hired me to work on baseball but

the first day i was there a producer named seth rosenfeld turned to me and said

you know do you know anything about the nba and i said i know a great deal and was like can you do these stats for

nba jam te can you you know we need an update of players and how their performance is and that's like my first

job as i walked in the door to claim i redid all the stats and all the abilities for

jmte and it's many incarnations on many different platforms um and he gave it to

me thinking it's gonna be like a couple week project and i i just stayed there until i finished it um

and i'm i'm like look you the stats desperately needed updating but that was really you know

the first job i had was all sports at acclaim so did nba jam all-star baseball which was really frank

thomas big hurt baseball nfl quarterback club and then really touched most sports things including you

know helping mark archer's team out and and and playing blue sky builds for wrestling uh but really was was sports

all the time um almost the point where i was like the

sports guy in a claim and i i was a big game player not just sports and really wanted to do other things and

one day they came around and said does anybody want to do this game south park it's going to have

a very short development cycle and short development cycle for those who don't know is basically

another way of saying it's going to be a really shitty game right you have a short development cycle it's guaranteed

this this short this development cycle was about four and a half months um which meant it's going to be whip it

dip it ship it kind of product and it's gonna really the bed both commercially

and critically not gonna be any good um and i raised my hand and all is like

stepping forward in the military where everybody else is stepping back and my buddies were like what are you

doing like this is that game is going to suck it's like no time for development it's a licensed product so you know the

license is going to be like super meddlesome and have all these roles and you're not going to make a good game um

but the the trick there was the developer that i knew was on board was uh iguana in austin texas and

they were gonna i knew the plan already was gonna be to take the turok

engine and do south park on the turok engine so even if the game itself suffered from tight development

timelines um that we're going to be able to do something that worked better than anybody else there expected and i've

worked a lot with iguana austin um and knew those you know the talent at

that team there um and so i remember flying out to la to meet with you know matt and trey

and they showed up in pajamas and i was thinking like this is pretty badass like these guys

came in stoned out of their mind um and they were easily two of the most brilliant creatives i'd ever met um they

were like we want to do turok but with south park characters and i was like boy did we pick the right studio um

so it was a it was an awesome experience and that game we actually um we actually shipped late um

we ended up shipping it takes about six months to make the game and we missed christmas uh and i remember everybody at

acclaim was best really pissed that we'd missed christmas but what happened we got we caught a lucky break

we actually shipped because christmas back then meant you were in store shelves

for black friday um and and you you the console the cartridges came out or the

disks came out in time for the day after thanksgiving um but we didn't land in stores until the day after christmas on

december 26th and what that what happened there was you had all these kids who wanted to play south park

and who were never going to get south park for christmas so they got a bunch of shitty games for

christmas and they returned them to the stores and they're like what's new and they're

like this south park game just came out and so these kids were returning their games and getting south park which was

obviously a more mature rated game um and it ended up selling well over a million units and after that acclaim let

me work on whatever i wanted it didn't just have to be sports um so after a claim i went to universal

and was at universal for a significant period of time up through from 2000 to 2004

uh 2004 i basically got fired slash let go slash laid off whatever you want to call it um

and went to warner brothers for nine months um and i do remember i was at warner

brothers and uh i literally was out of work for like a day i can't was in st louis watching

the red sox win the world series i flew home uh the head of warner brothers called me and said hey we heard you're

no longer at vivendi because world travel you know word travels fast in this business um and so he hired me

the next day i went to warner brothers and i remember the first week i was at warner brothers i had already agreed to

go i already had agreed to go and interview at um activision

and um even though i had taken the job at warner brothers i still felt like i owe it to the friends i knew at

activision to go there and as i'm sitting in the lobby waiting for my internet activision who do i see but

ames who knew i just started at warner brothers and he looked at me like what

are you doing um but so then i i was there for nine months and then the guy that had let me

go um he ended up getting fired from the

vendor universal and they made me an offer to come back um and i ended up coming back to vivendi

universal and was there up and through uh you know finna go i

went back to finish scarface um and then after scarface was over i

started ghostbusters and after ghostbusters uh i got into it again they wanted me to rush ghostbusters shipping

and i was like go yourself um i don't want to release a bad game because short development cycles or rush

development cycles are always means bad games and i ended up going back to universal proper to go work with bill

kissberg and was there through you know through about three and a half

years ago four years ago when i left there to form nifty and worked on a host of licensed ip both sports film

television both at acclaim and universal and warner brothers um and so i've really been

working mostly on that and now with nifty games uh back doing free to play live quick session head-to-head mobile

first sports games currently there's a lot of game studios desperately seeking ip what if they can

get it just because of idfa deprecation and the potential and the way that a lot of the game studios think about the

impact is really around downloads and revenue at least from a mobile free to play perspective but i was wondering if

you guys could talk about the way that you guys think about it or game studios should be thinking about

how does entertainment ip actually impact the game i can jump in further from just more the

marketing side and these guys speak probably more on the product side on the market side you know an entertainment ip

should deliver us uh superior roads i mean in marking speak it's it's it's it's uh

you're going to get more awareness plus better trial intent because of the familiarity of vip

um the the the exist your pre familiarity with game play or with these uh story well it should easy onboarding

because you have a sense of what you're getting into as you go through it so that's certainly going to help with the

early part of the funnel and it also gives [Music]

instant depth for updates or for uh long play content you sort of know what it gives the you know dev team uh

a tighter sense of what they can plan around going forward and many times the ip owner is doing some sort of marketing

themselves and they can do cross-promotions with him yeah i mean i think it you know it's

interesting because if nothing else like it gives you an initial world to build to play in that's

that's established in terms of the rules the settings the characters their abilities

you know and some studios and some people are wired in a way where like they want to have constraints going into

a project and some people want to start with a completely blank slate and establish all those things themselves

but you know that is one of the advantage that you get in addition to the popularity and recognizability of

the brand name and the characters is that you instantly get a framework for a world to build your game around right

it's just a question of what ingredients do you want to focus on and you know that's that's been the

thing for me that i've been attracted to in my career is being a fan growing up with these ips

you know in the 70s and 80s in my formative years um

you know i couldn't imagine just the way that i'm wired and how i grew up somebody handing me a blank slate and

it's like okay in three and a half four years i need you to deliver me an 85 rated triple a game that's going to sell

5-10 million units i wouldn't even know where to start right so like i need those constraints i want those

constraints and and a lot of studios you know appreciate and and think that way as well and then there are some who

are like you know no way i want to do my own thing i don't want to touch that so it's really interesting and also i think

that like as these ips have gone from being more fanboy and niche to you know the explosion and the mass

popularity that we're seeing now over the last 15 years you know seeing studios who traditionally would never

have done a licensed ip game like i'll look at insomniac who's been you know one of the one of the best studios in

the world for a long time but they were doing all of their own ips um

you know almost their entire existence up until the point where you know i guess the spider-man opportunity came up

and you know i guess it was you know something that they couldn't refuse or they had a personal passion for or some

combination thereof and you had this studio have this long-standing reputation of amazing original

game-centric ips touching one of the biggest entertainment ips in the world so it's really interesting to see how

that transition has evolved over time and how now these bigger studios um who traditionally don't do those type

of games now you know are are clamoring to get their hands on them as well because you know again there's probably

people in those studios like me and like pete who grew up with those ips love those ips and be like hey you know what

i can make an amazing game off that if i ever got the opportunity yeah i think both ed and ames hit it but

you know the last point that ames made which to me is that is the center of this which is

if you're making games games are schlock it's a really hard job to make product right like making games is really really

tough and you're talking about you know use you know when i first started it was you know

nine to 10 months 11 months to make a game and then it went from you know a year and a year and a half and

then now two years or two and a half years some games go much longer if you're going to go into the salt mine

every day and try to make greatness the thing you have to have at the start of that to make something really good

is passion and when you're talking about ips like you know

you heard you know ed names talk about sort of the games that they you know they had worked on and ip's there like

those ips are you know when ames talks about working at marvel like that stuff is

you know i i grew up on marvel like i grew up reading you know marvel comic books in the in

the early 80s like that you know that was like that was like the holy grail of awesome

superhero ip and so when you hear that you know and then here

you know those guys got to get together and make a hulk game well i still remember

looking through you know the hulk issue where wolverine makes his first appearance and be like

that stuff ignites passion and you need passion to make great stuff and yes all the other stuff is true it

can it could be an identifier for players to see that you know separate an original product you see

a hulk game in the store and you see an original game with a big guy who smashes things like the hulk game has all of

that massive nostalgia pull but you need that kind of emotional boost if you want to make something great

sometimes you can get it where you know somebody has an idea and the studio gets behind it well you got to sell you know

you're constantly selling that original idea but sometimes that blank sheet of paper with no scaffolding or rule set

around you you know sometimes that's daunting to get everybody in the studio there but if you have spider-man

holy everybody's excited to work on spider-man and then look at the product that they go and make with it right i

begged you know i beg ted to do jurassic park slash jurassic world

and they didn't have the passion for that ip when i was at universal trying to get them to do you know an

action-adventure game set in the jurassic done by insomniac like that to me was my thing and then eventually they

did it with spider-man so when they did it you saw what they had i would argue that that's the best game

they've ever done and i would also argue it's one of the best superhero games ever done and one

of the best ip based games ever done like it's an immense amount of people working really hard for a very long time

but because they had a passion and fire to tell those you know stories and and and not other stories not stories that

spider-man had previously seen but original stories set in that world that's when you get really real

greatness comes out yeah i think the other thing what pete was saying is like the important thing

is that like games like arkham and insomniac spider-man were so high quality it transcended the

ip so it wasn't just like oh i really you know i'm i'm really appealing to mcu

fans or to dcu fans of the film the movies and the cartoons and the comics and whatnot is like

that game was those two games were awesome action adventure open world games irrespective of the ip right so

everybody was talking about it on the gaming front whether they were a fan of ips or not and you had to have those ips

in your rotation you know to talk about it on the school yard or talk about it over uh the water cooler at work because

again those were games that just transcended and were you know top top flight high quality games just in

general that you had to have and i think that's the interesting tipping point now is that you know as there's been such

contraction in the industry and there's such fewer games but their bigger bets now

is like you know it's in the past like but you know pete was talking back in the the 16-bit era right there was a

huge amount of flood of games out there a huge amount of publishers i can't even imagine how many skus were released

every year you know between you know sega and nintendo in that era

but you know the expectation level for an ip game in that era was not the same even remotely the same

in the same stratosphere as it is now so and any like you know pete said the investment level was low

so you know if the game wasn't high quality and didn't get a good metacritic it wasn't necessarily reflected in the

sales because the ip was so huge the investment was relatively low if you sold a couple hundred thousand or a

million units right if you were the publisher you were making money the investment level now and the expectation

of quality and the amount of content you have to have now you know we don't you know 50 100 200 million dollar

investments to make these aaa games you know that's no longer the case you can't just

sell and get your return based on the game on the ip alone these games have to stand alone and go up against and be

competitive with the biggest non-ip games in the industry so that's the paradigm shift that i think that's

changed and i think along the way the games like arkham and insomniac spider-man have paved the way to say you

know what no you can make that high quality level of game that will transcend with these ips if you have the

right studio with the right passion and the right experience behind it like pete was saying

right and you know when aim when ames goes and does batman he you know he has

he has all the work of having to hide all the other terrible batman based games previous now there were there were

some okay ones there in there as well but like the problem and i'd probably speak to

this better than anything is like you know marketing when they see that ip like

sometimes they you know it's like you can try to say well you know what well the game's not that great but it's still

batman and batman ip is awesome so maybe we can

sell it even if the game isn't up to snuff you know and

often times production hands marketing a really crappy experience because lots of reasons we get into but you know

then that's what happens in this business like oh it's batman so it still can be

marketed because kids are still gonna want to play a batman game regardless i think the best thing that's ever

happened for ip games is social media because in the old days like ames and pete were saying

you could sort of hit and run a lot of these publishers would just shove it out there you'd see the package on the shelf

of some ipa really popular that you want to play you just buy it and then it's it's crappy you don't know

any better but i think that in this modern days or to give you another example when i did the simpsons

hit and run part of the marking plan that we focused on was how were we going to

convince people that this wasn't just another crappy simpson game like all the previous simpson games had been

and we had to go out of our way to try to get views review comments and quotes to put on our early marketing and our

favorite ended up being best simpson game ever which we had to use over and over again to sort of overcome that

preconceived notion that all sims and games had sucked until that until that point

but when the when social media came along suddenly the speed of which people found out whether game was good or bad

became hyper fast really hyper accelerated and the great games could now stand out and do extremely well

arkham i think was probably the the great pivot point where you say oh you can make a great game and you can have

great sales and it doesn't have to be day and date with some movie just be a great game based an ip and it will work

and i think that the business model and the attractiveness of the publishers shifted from oh let's just get it out as

quickly as we can to no let's invest in this and make something really big and we'll get a much bigger return

yeah are you really going to i was just gonna i was just gonna give

ed chit for crapping on krusty's fun house like which was a really really

did you work on that p no i didn't know before my time

two two or three years before i even got to a claim but yes it was an excellent that's a you know i

was just gonna you know emphasize his point about social media right because all of a sudden everybody had a platform

to know whether a game was great or crappy right and that was very influential probably on people's

decision-making process at that point and again like i said you know now the investments to make those

games was such that you could not just rely on the ip and a cool looking box cover anymore the games had to stand on

their own they had to be quality and again you had this platform where people immediately knew if the game was good or

not so yeah i'd say that's a huge you know pivot point in in the life cycle of the

evolution of ip games in our industry right now yeah it definitely oh sorry continue

i know it's your podcast maybe we'll let you talk at some point i'm learning here guys i i'm enjoying uh

listening to the stories you know i think at the point about social media obviously really so he gets

it but you know before we had social media we really had to rely on sort of you

know metacritics and critic rankings and really having a dialogue with some of the

better you know media people within games you know so the the the ones that really got

it and weren't sort of shills you know tal at ign and and andy and andrew at you know game informer like

there were you know jeff keely or you know and guy kroll like there were a group of unbelievably really smart

talented journalists that you could have a dialogue with but the dialogue was slower now that dialogue is immediate

and it's needed because games now are even more immediate and games now don't just

ship in a cartridge or a disk and then they're out and you can't do anything about it now it's constantly changing so

social media has to respond to the fact that fortnight's getting its update every single day that store is getting

updated yeah so maybe we could take it back to product or sorry

impact of ip and marketing and given social media given how fast things you know how fast news comes out how do

you think about whether it's on the free-to-play site or mobile free to play side the impact to roast or

you know unit ship given social media how do you how do you think about whether it's a

framework for quantifying that or when you're trying to understand what the potential impact could be

and you're looking at an ip what what kind of goes through your head along with the same parameters you look

at for any uh green light process when you're thinking about making game you're looking at the competitive sets you're

looking if you have a trail a history a great thing about ip as opposed to original ip is there is some sense of of

of what's gone on in the past that you can look at you can measure very often other people have made games using that

ip you could examine what went well and what didn't go well with them you coming you're instantly coming along

with a partner in this particular case because it's whoever owned vip and you know the the kind of partner

you're working with also has an influence on how well you're going to perform so that that

comes into consideration certain partners all ip partners meeting licensors they're literally just looking

for the highest monetary return they can get they don't care about anything else versus other licensors are actively

trying to improve the brand equity and they're they're very cautious to not hurt the brand equity and trying to do

the best for their product um so there's a lot of different factors that come into play when you're dealing

with a license ip right and i think

i'll just say to that to that point two i think you know one of the things when i wanted to marvel that i you know kind

of tried to change was you know at that point marvel had was coming out of bankruptcy this was the

end of 2003. and you know across the board they they kind of just you know

leveraged you know licensing out their ip not just in games but in you know film as well you know the stories are

out there about how many different studios marvel did deals with to get you know

minimum guarantees to help fund their recovery but in doing so they mortgage their future

right by giving all of these studios you know massively studio friendly deals and rights in you

know for a long period of time to these ips so you know marvel's you know all their top

ips were basically mortgaged out to the biggest studios in town and on the game side it was very similar

there wasn't really a strategy to say this particular partner with this set of development studios in their umbrella

are the best fit for x-men or this best fit for hulk or best fit for spider-man it was really about who was coming to

the table cutting the biggest minimum guarantee check that they could just put right into the bank not even thinking

about the impact and importance of growing that brand through games and how important games was as a mechanism and a

trojan horse so to speak to get people into the ips because you know not everybody gets in through a

comic book or gets in through a movie now you know in in in gen y and later generations right

games were becoming more and more the entertainment medium in which they engaged with the most right so you know

it wasn't like you know pete and i are old old salty dogs that you know we grew up where you know like with star wars it

was all about the movie right and then we got the toys and then we played the games like my son

who was born in 2003 his very first introduction to anything star wars was watching me on the

original xbox play star wars battlefront right he had never seen or heard of star wars before so that became his

introduction to gaming but then his introduction to the star wars universe and from that

he wanted to watch all the movies he wanted to buy all the toys he wanted to wear all the costumes so to me it was

like right before my eyes i saw this transition of the tail wagging the dog that was so different than the way

things worked like in the 80s and early 90s let's say when pete and i were kind of in our formative years so

you know it was really interesting to see that transformation so like when i was at marvel and i got to kind of

you know get was handed the keys to the car and and was able to make some of those

decisions about like let's pick the best partners that are going to give us the best games which ultimately then is the

others going to yield financial returns but those hulk high quality games are going to help the overall integrity and

appeal of that particular ip yeah and it seems like in some cases there's like a fit between whether it's

a partner an ip or a specific type of gameplay in an ip and we've seen and i come from the free-to-play mobile side

so kim kardashian's a good example of a failed game but then you slap kim kardashian on it and all of a sudden it

becomes a hit game and so aims or or any of you guys if how do you guys think about or what should

people be thinking about whether it's game skus others when they think about okay

i have an engine whether it's turok or whatever or i have something and i'm trying to understand whether this ip

would fit or not okay so i mean i think for you know when you get when you get an

engine like if you're worried about that i think you have to start earlier than that right to me you have to start with

do you have a game concept that makes sense for the actual ip right and if you don't if you try to

if you try to jam something in that's not going to work it's got to be something that naturally fits itself for

the ip i think one of the biggest problems with that is

so often that the the ip holder tries to dictate to you what your what

your your story is slash what the character can do and often for a long time games

were seen as you know sort of a medium where you ended up where oh you know we could do this in

the movies right like we can have a character in this film he can shoot guns but if you try to shoot guns in a video

game well the you know the actor that portrays that character he doesn't want to do that or be seen as shooting guns

in the game like are you kidding me like you know why do why do i have to

play by a different set of rules than the other medium so if you're gonna get those types of restrictions you know

that's right away you're entering a bad deal you know you shouldn't do that because they're not they're not taking

games seriously you know and i think you you've seen a lot of changes like if you look at what you know fortnite has done

right all of these characters are like oh no we don't want that character shooting guns right all of a sudden oh

fortnight oh my my my my my son jackson he he didn't know you know it's amazing how many

characters he's exposed to that he never knew before that he only learns because they're in fortnite right and forever

you had all these you know oh we're not gonna let our characters shoot guns like and then fortnite comes along it's like

wait hold on it's the most successful game of all time and every kid is playing it it's all kids talk about at

school and you can become culturally relevant simply by showing up in their store like and by the way it works it's

true and all of a sudden people like oh and that when you they see a chance to be

exposure but for for a long time you know games were not given that same consideration they were dictated rules

about what you could do and couldn't do all because they didn't respect games at all

and that they just viewed them as this is a lunch box right oh go out there and make me my ancillary revenue right can't

do that in the movie version you can do that in the movie version but can't do it in the games and it's really

taking games like league of legends and fortnite games that sort of are everywhere all over the world and are

the most played most viewed mediums to start to really you know wake people up again and the other big factor is that

we're seeing people who grew up on games and love games are now finally at the executive

level and finally in the stands to be like no games aren't a little like they are actually like should be treated

with the same respect oh yeah that's right because we're kicking their ass in terms of revenue so we understand now

how how that those tables have turned certainly funny our maybe you can help with this ames but our number one

concern for tonight was how we were going to convince dc to allow us to have batman inside of our invite our shooting

game we had like long discussions i mean donald mustard was very huge comic book fan huge batman fan

had long deep discussions about how we could uh present it in a way that felt naturally natural and authentic for for

batman to be in the game hopefully it worked out but i'm wondering on on the dc side how much thought went

into that before you sort of went along with it yeah i mean you know the good news is

you know jim was jim lee was the chief creative officer of dc at the time and and he's a huge gamer and he really you

know embraces and understands the importance of games you know he's worked on a few game projects himself directly

over the years so he gets it and understands it in addition to being a gamer i mean he's literally a lifelong

mmo guy so you know understanding that basically fortnite is not the real dc universe

right fortnite is its own universe it's a virtual universe right and you're not necessarily playing batman you are your

character who's equipping the batman skin and living out of batman fantasy as opposed to a game like arkham which we

say is more canonical and you're actually in gotham city and you are batman so we try to find ways that again

you know embraces the fact that you know we want people wanted to have these characters in the game but again

fortnite is a different kind of universe in a different virtual world from the canonical dc universe where

these rules are essentially that it's a version of cosplay it's like wearing a halloween costume it's not actually that

character because a player is putting the skin on and going on and playing at it and therefore just like cosplay or or

probably more can to to halloween you don't have to actually follow the actual rules when you give the player that kind

of agency and and you know whatever you're getting from tell yourself

to get it yeah thank you batman ended up in fortnite right like

to me it's just a crisis on a different if infinite earth right like right you know batman like i used to argue that

all the time like you know the the rules of dc like okay well if superman can be

russian in one universe why can't batman shoot a gun in another right like it's not the same batman it's just a

different shard and so you know we have to like even the notion that you'd have to make up some carrot like oh it's a

costume like all true by the way but even the notion that you had to do that like yeah come on it's ridiculous like

it's just so ready like stop disrespecting video games like and get and make them second class

citizens but thank god you guys found a way to figure it out because you know my son cares more about batman

because he sees the batman skin in the fortnite store well that also opened the fun

gates once we had batman it was much easier to explain to other licensees because it was the

it was the one shiny example of someone who would never touch a gun was now using weapons inside a fortnite

right and it seems like i p restrictions is an example of potential issue or problem when you're working with ip but

in terms of other things that some of the folks in our audience should be looking out for when working with ip

what are some of these potential problems that can arise that you guys have experienced

it's not the case anymore because now it's you know the examples i gave these studios want to work on these ips but

like you know but in the back in the day if a publisher would get the rights to an ip

right and they had you know sometimes they'd go with an external developer and find try to find an external developer

to develop the game but a lot of times they had a ecosystem of developers under their umbrella internal studios

and they would just say okay this studio is available we have this license we need to deliver

a game for marvel we're gonna assign it to this studio but is that the right studio to make that game

like is there dna the right studio to make that kind of game given the mechanics and the features you would

need to do to do that character right in addition to they have the right technology and engine and then third

piece is does that studio love and have the passion for making that ip and a lot of times

two or three of those things would be no if not all three right so that's a big reason why

you know some of these games came out and they were not you know up to par some of it might have been budget and

time but a lot of it might have just been fit and passion wasn't there so you have to make sure that like you know

again especially in today's day and age where the game itself has to stand alone and you're not going to sell your units

and make your return on the name of the ip and a pretty box pretty box art is the studio has to be the right fit the

studio has to have the passion for it and if you don't have it then like pete said these things are you know this is a

three four year if you're talking about aaa whether it's free to play mobile or even aaa you know console it's you're

seeing it now they're both of them are three to four year commitments to come to market right so if you're not

passionate about it and you don't have a unique take on it and you're not the right fit for it then you know it's it's

not for you and and i think that's one of the things where we've tripped up before but i think that's gen you know

generally speaking that's evolved and changed over time and that's why you're seeing the arkhams and you're seeing the

insomniac spider-mans of the world you know getting those kind of you know reviews and sales numbers

and a lot of those times those games didn't get financial they didn't get nobody skimped on them financially right

you don't look at that spider-man game or you know that batman game and think like oh the

budget was significantly smaller oftentimes and i don't know if this is still as true today but it certainly has

been true and i'm guessing it's true in number of areas particularly on games that don't get as much love but

you saw the development cost cut you know the cost to license the ip to make the game come out of the development

budget and so inherently ip based games always had smaller development budgets and guess

what the budget matters how much time you have how much team size you have the quality of those team people how much

you spend on making the game makes the game better or worse so when you start with a lesser budget you're

saying right off the bat we're making a trade the value of the ip is go we're gonna we're gonna spend money to get it

and we're gonna take that money out of the amount it costs to make the game so the game is inherently lesser than a

non-ip based game here if that should have been shared with marketing right because like a lot

of the value of the ip is it's awareness it already has built in intent so oh it's not just marketing some of it is

product development it's not a blank slate so you are helping the dev site as well but shouldn't entirely come out of

the depth side of the budget i agree with that you know completely i'd also say joseph but one of the issues are a

new for someone new who has never done an ip game before

particularly these mobile companies or it's new to them is that they need to understand that you know they're not

just you know peter alluded to creative constraints but you're going to have a lot more approval proverbs in the

process it's going to slow it down it's meant to you know make certain that it's it's on on brand and not filing the ip

but that means you just need to be prepared for a lot more steps involved with the processes through more cooks

involved with the process you just can't go as quickly as you can with your own game

another variable i just throw in there that was an artifact of of what we saw in terms of lower quality games during a

period of time let's say in the ps2 and early ps3 era was a lot of the games based on the on ips

were based on the movie version right and the whole see the movie play the game equation was

hugely successful in some cases but in a lot of cases it wasn't right and and a lot of times going back to what pete was

saying in terms of time and budget like hitting the movie date superseded the quality and the investment in the

game right because if you weren't there day and date with the movie to sell that fantasy of see the movie play the game

run out of the theater go to best buy and go buy the game and play the game right that only worked in very few

occasions but that became the model for a period of time and again like to hit that movie date means you were

sacrificing a lot of quality and more time that that that that game needed to bake and to iterate be iterative and to

be polished that just was thrown out the window because of the dates and that constraint so you lost the content

yeah i was just gonna say spoiler alert the person who came up with that concept

wasn't on the creative development team right that was not the person trying to make the game better right right that

was a person who didn't give a about the game and just cared about trying to make a big marketing date and

didn't care if the game was good or not because they weren't they were using the game to help sell the movie

because the game wasn't seen as an artistic medium the game was seen as a lunchbox to help sell the film

and maybe the next question i can ask you guys especially for our audience especially those new to ip licensing is

like in terms of the licensor what are they looking for what should our audience know about what the licenser

would would be looking for what they would want today i think that you guys can talk

more broadly or specifically about it but i think very broadly they're obviously looking for a financial return

from it they're looking for they're smart they're looking for ways to enhance the brand equity of vip

they often are trying to make certain that you know these these license stores have

limited resources so that it's not going to be a huge drain on their staff if they're going to to to

do this in some cases there are soft soft requirements like trying to keep

certain talent on the ip or executives happy within the studio or the entertainment company that need to be

taking you in into account you know very often those people want to have a say in it and if it somehow makes them

happy to do so you need to be take take into account whether or not some movie star is going

to have some comments on your your game uh up front and hopefully if you're working with a good

licensor like i'm both these guys i work with both these guys very very good they'll be upfront with you about the

kind of issues you're going to run into and that you know you know about them in advance and deal with them

yeah i think also as a you know the the you know the examples that we gave about some of the bigger

ips on the planet you know the star wars and the disney's and the marvels and and uh

dc and the success that they've had both on the critical and the commercial side i

think woke the rest of the industry up right about how if done well these things can be really successful and

really get a lot of people engaged in your brand and a lot of the times going back to the tail wagon the dog thing a

lot of times this is the way that they're engaging with these ips as their introduction

and you know no longer did they look at it like okay you know we have a checklist of things that we need to

accompany the ip ecosystem especially when it's a movie right and the qsr program with mcdonald's and the toy line

is one of them and the games used to be one of the parts that has check boxes where now i think studio executives and

ipa executives are realizing that it's a critical critical part of the overall ecosystem and success

factor for engaging and monetizing on that bigger ip and if it's not quality then those things are not going to come

to fruition so you know i think the broader industry the broader ip holders across the planet

have woken up to that i mean now you're seeing a lot of these other ip holders you know try to have dedicated game

divisions whether they're actually funding and publishing it themselves or they have an infrastructure to support

them working with external companies i think i think they see the value in it again not just on the monetary level but

in terms of engaging people in the brand right and maybe the question that a lot of folks are i want to know about i

it seems like some folks don't like to answer this question but in terms of how deals are structured in terms of a

license can use aims you had mentioned mg could you guys speak to explain mg and

explain what a typical deal might look like in in order to secure an ip for a game to

the extent that you guys can talk about it yeah how much would be great too you

know i'm gonna i'm gonna hand that off to ed and i'll i'll be happy to jump in with anecdotes

based on what that says i'll be having the basics you can jump in when it comes to get estimating the

range for royalty rates there you go yeah the mg is a minimum guarantee so

there's a couple of basic parts of the licensing uh deal right you're going to have obviously a term all contracts have

term but in this case it's defining how long you can use this ip so that's part of the boilerplate you often have if

you're a royalty deal you don't have to be a royalty deal by the way but if you're a royalty deal it means you have

a usually a minimum guarantee that over the life of the deal you will pay this amount and often there's an

advance so on signing you're giving them an advance amount and then over the life of it the deal you're promising them

you'll pay a certain minimum guarantee now the expectation of everyone is that you'll be so successful you'll break the

royalty bar you'll do better than that minimum guarantee but in the event that it goes badly you

will still owe the minimum guarantee to the the license license or there also

typically there's a sell-off period if you're a physical good we're talking mainly about digital games you don't

really have those kind of issues here they typically have very clear about what will require approvals on their

part whether it be marketing or product approvals and and all of that and sometimes talking about categories

very specifically which categories because other other licensees may be getting categories they may also be

making games based on your ip but they're in a distinctly different category hopefully so you're whether or

not you're getting exclusivity for that category is part of the part of the deal

and sometimes there's a minute there's a minimum marketing requirement you know to be you know things like that there's

potentially sometimes if you know if it's a big entertainment company there's a part of the marketing spend would be

spent within the entertainment company across their different channels and mediums so that's another just part of

the equation as well and going back to what ed said sometimes about term you know term sometimes like if i recall

it's been a while now like some you know there would be a minimum amount of games like in a term as well like you know if

we're gonna give you this license for five years there needs to be a minimum of two game commitment

and but you've got to be strategic about that because they don't go back to what we talked about before about time

meaning quality right it's like how much time is it gonna take to make one high quality game probably at that period of

time it was a minimum of two two and a half years so you had to be careful about you know

asking for too much out of the publisher that ultimately was cutting your nose off to spite your face about actually

getting quality out of it i think you have to ask yourself what you know what your objectives are in

sort of when you're licensing a game to a different publisher like you know what what's the objective are you trying to

make a great game because you want to protect the ip or do you want to make it so that you have a game that comes out

for day and date with the movie right like what is important to you about this in licensing the game and then

that's what you have to ask yourself for in terms of is the minimum guarantee important because sometimes it is right

sometimes you have certain numbers you have to hit you got to sell a certain number of things you have to maintain

your job or or you know when i work with bill kissman at universal bill was there to make great stuff right

he wanted to make culturally important games that stood out and he's done that his entire career um that he has the

ability to do that but sometimes there's a commerce aspect of the business and and yes games

can be art and all that stuff but if games don't make money you don't get to make more games

right you don't get to keep working in the business if you make games that don't make any money so you know it's

really important that you understand that like giving the game the amount of proper

amount of time to be able to make the game but sometimes your objectives for a license are different things right

sometimes it's just like hey we have to get a certain number of deals done based on this film

to be able to to tell people this is what we're doing for this particular filmmaker this particular producer this

particular actor so it really depends on what you're trying to do that shapes those deals accordingly you know

sometimes it's about making a great game and sometimes it's about making money and sometimes when it's it's to

what ink and pete were talking about for marketing reasons sometimes when it's purely for marketing you're not even

dealing with the licensing department you're dealing with the marketing department at the studios for the sort

of cross promotion very often it's not a full game but some sort of cross-promotional license will occur the

games people are aware of them and obviously helping coordinate them but very often the deal is actually done

with the marketing department the studios for those types of like a half a meal style promotion

right and then in terms of royalty rates i mean if we look at some public company

you know financial reporting we see rates for some companies between the 20 to 30 percent rate

could you guys blink twice if that's the general [Laughter]

i'm gonna close my eyes so i can't blink and then there are rumors sometimes of like 50

deals depending on you know how uh how big the ip is but well maybe like in in terms of like the the advance at you

you'd mentioned the mg advance are are there typical if you can't speak to like specific numbers

or are there specific methodologies that you could speak to in terms of how you would come up with that number or is it

generally just pulled out of is it just like a market rate pulled out of somebody's botox or

how's that number arrived at well in theory it should be based off of sales projections formula i don't think

there's an actual formula for this um and these guys have a lot more experience on

doing these than i than i i have because they've done so many more of these deals so they have many more data points

associated with them from the light source side what i will say ed though like without

going into specific numbers or specific examples is in theory it should start with if i make a great game based on

this ip i think i'm going to do x amount of revenue right

and then from there it's okay what is the the market value of that ip in terms of the royalty rate that ip holder is

going to expect to get and that's basically the formula of how you get your mg

like it's really pretty simple but there's a lot of variables in there in terms of the expectations and value of

the ip vis-a-vis what you think the ultimate sales and revenue coming in is going to

be yeah i would probably like a percentage of which wishful thinking case that it's

going to be a great game but work things fail so i don't know if i faced my mg being having a hit game

so ames would you would would you would you agree or would you submit that like maybe that

approach like a percentage of of revenue over x years is the general approach

in or or one of the popular prices again yeah of course you're going to have a p l and you look at financials going out

you'll look at various scenarios what if the game fails what the game does well and based on that you try to triangulate

something that that sort of accommodates the risk associated with what you're doing and the potential upside if it

happens the the the more of these that you've done the

more it starts to feel more and more comfortable estimating what what they could be very often the the various ip