The Difficulties of Making a New IP

IP’s are a huge part of not only the games industry but of the entertainment industry as a whole. Just look at all the movies that came out this summer, and most games that will come out this Fall, they tend to be based on established IP’s. Releasing a new intellectual property can be a daunting task no matter the size of the company or the studio, especially when it comes to video games.

And despite their important role in the industry, as they bring innovation and create new worlds and icons, there are some reasons why we’ve seen less and less of them each year.

High Costs Bring More Risks

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According to reports, The Division cost more than $70 million to produce

Investing on a game that can be easily recognized by consumers brings a much smaller level of risk to any publisher, especially when only 25 – 30% of them become successful as Phil Spencer claimed in an interview with Metro, and game development costs are higher than ever. Assembling a team of more than 100 developers, that will take 3 to 5 years, and spend from $30 – 100 million on a project based on a brand unbeknownst to the audience can represent a major risk to any company.

An example of this situation happened with the release of Kingdoms of Amalur: The Reckoning, that reportedly cost more than $60 million to produce, causing the studio behind it to go bankrupt after it failed to meet sales expectations. It needed to sell at least 3 million copies to break even, and in spite of a positive critical reception, it only managed to sell 1.2 in the first 3 months.

They Hardly Sell As Well As Known IP’s

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Another important factor is the fact that it’s pretty rare to see a new IP cracking the top 10 as the highest selling games of the year. If we consider the most successful in the US this generation we can see that only 4 new franchises managed to hit the top 10, with most of the other games being part of annual or long running series.

Highest Selling Games

2014 2015 2016
Call of Duty: Advanced Warfare Call of Duty: Black Ops III Call of Duty: Infinite Warfare
Madden NFL 15 Madden NFL 16 Battlefield 1
Destiny Fallout 4 The Division
Grand Theft Auto 5 Star Wars: Battlefront NBA 2K17
Minecraft Grand Theft Auto V Madden NFL 17
Super Smash Bros (for 3DS and Wii U) NBA 2K16 Grand Theft Auto V
NBA 2K15 Minecraft Overwatch 
Watch Dogs FIFA 16 Call of Duty: Black Ops III
FIFA 15 Mortal Kombat X Fifa 17
Call of Duty Ghosts Call of Duty: Advanced Warfare Final Fantasy XV

Only those backed by huge companies such as Ubisoft (The Division, Watch Dogs), Blizzard (Overwatch), and Activision (Destiny), sold more than the likes of the NBA 2K and GTA V. And even those supported by big companies like Microsoft are not guaranteed to succeed as we saw with Sunset Overdrive, that received rave reviews and was considered one of the best games of the year, and yet, failed to outsell their expectations.

Even though in this situation a poor release date, in the fall, it goes to prove that even quality titles are prone to failure. For smaller companies that don’t have the marketing push or the financial power to rival the big publishers, the struggle to catch the eye of the audience and fight with massive franchises is even bigger.

Marketing Them Isn’t So Easy

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And it all ends with the fact that marketing them is much harder, as there is nothing that the marketing team can rely on to present their product to the audience. Marketing costs comprise nearly 40% of the budget of a project and having the opportunity to turn to famous characters, worlds, stories can help mitigate the risks. That’s why we see Forza Horizon taking the name of the Forza series, although it doesn’t share a lot of similarities with the Motorsport series.

New IP’s can’t follow the marketing cycle of franchises like Fallout or Assassin’s Creed. 6 months to introduce games that become more complex with each generation just isn’t enough. The necessity of introducing a project years ahead of its release can end up creating a backlash, as we saw happening with Watch Dogs and The Division. Or exhaust its image like Cuphead, as we’ve seen it for the first time in 2014, and it will only come out more than 3 years later, creating a sense that the consumer is tired of it before it’s even released.

Making games is incredibly hard and fluid, as a game will rarely be completed the way it was planned at first. The prohibitively high costs that come with creating an AAA game, the difficulty of having to sell millions of copies to cover them, and the necessity to create a marketing strategy that can present a new project in a comprehensive manner, only make it even more complicated.

Without new properties, innovation might decrease as we see more and more sequels coming out each year. They are also very important to bring new and exciting experiences that are crucial to the financial success of the industry. Like Hellblade, that can present a new possibility, as it isn’t as expensive as a big title, but that brings a great level of quality, making it easier for smaller studios to compete without depending on a publisher. We should want to see new IP’s, but we have to remember that in order to see even more we need to support them financially instead of just demanding them.

 

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