In the gaming market a lot of entities with different characteristics, business models and goals operate. Licensing relationships can exist both between either of them and between them and entities unrelated to gaming. In the latter case, licenses can be both acquired by industry players (e.g., for the purpose of creating a game in a universe already known to gamers from elsewhere) and granted by them (mainly for the purpose of generating revenue from the use of the intellectual property contained in the game by third parties).

Is acquiring a license for a well-known title a recipe for success? Not exactly. A comparison of the fates of games "Pokemon GO" and "Harry Potter Wizards Unite" serves as a good example in this respect. Both games were developed by the same studio and based on extremely popular brands. Meanwhile, the former (which is about 3 years older) is successfully operating to this day, and the latter is no longer available for play.

A similar fate to that of wizards, some time later, befell witchers, who were a bit late to the party (the game "The Witcher: Monster Slayer" was released about five years after the success of "Pokemon GO").

Reasons for the commercial failure of games vary. Before you decide to acquire a license to use third-party creations as part of your game, make sure you have considered at least the following issues:

  1. whether the licensed IP is a good fit for the target genre of the game;
  2. whether the licensor may have reservations about certain features in the game or some of its content, which may translate into a decrease in its attractiveness (given the assumptions made and market analysis);
  3. whether the business model will be profitable given the amount and terms of payment of remuneration for the use of IP in question.

Problems in any of the above areas can be an independent obstacle to continuing work on the game, although each case requires an individual analysis. We can learn from the failures of others, but we should also not draw hasty conclusions from them. That Harry's world can be successfully transferred to electronic gameplay has been proven by, among others, the record-breaking "Hogwarts Legacy."

As for the licensor's influence on the game's content or its monetization potential, it is worth noting that considerations in this regard are not merely theoretical and do not refer only to artistic issues (e.g. a potential requirement to follow certain style guides). Electronic Arts learned this first-hand when, as a result of player protests, the licensor of the rights to Star Wars Battlefront II, i.e. Disney, was to force the studio to make changes to the microtransactions used in this title.

Licensing intellectual property for game development purposes can bring tangible benefits. Both for the licensor and the licensee.

The licensor can count on, among other things:

- an additional source of revenue;

- a chance to maintain interest among fans;

- the potential to reach new audiences.

The licensee, in turn, can, for example:

- save time by using existing creative elements;

- reach new buyers or renew the interest of existing players in the game.

Examples of positive effects of cooperation between representatives of gaming and other creative genres include the game "Dead by Deadlight", which, in a coherent manner, features characters and places known from a wide variety of IPs.

There is also a well-known case of direct use of the game as a kind of advertising medium. For example, in 2019 in the game "Fortnite" there was a display of the trailer for the movie "Star Wars: The Rise of Skywalker". On the other hand, in "Death Stranding" players had the opportunity to taste the energy drink "Monster" whose manufacturer, according to media reports, partially financed the creation of the game.

However, it is not the case that game developers are only interested in acquiring licenses. After the commercial success of their original product, they may want to make their IP available for a fee themselves – in order to derive additional revenue from it. Such partnerships can be established with representatives of a wide variety of industries and sectors, as evidenced by the following examples of expansion of gaming titles.

In the case of games, particularly important aspects to cover in the license agreement are those related to cooperation and marketing support provided to each other by the parties. Such activity can significantly contribute to the financial success of the planned venture. Coordinated marketing activities may include, among others:

- obligation to publish social media posts (including the timing and/or frequency of such promotion);

- sharing codes for the game or its content (e.g., for giveaways);

- joint funding of services by external advertising agencies.

Whether licensing someone else's IP or your own, it is necessary to pay attention to a number of elements, which we have already written about in earlier materials. It is crucial to be well prepared for negotiations and draft specific proposals for the terms and conditions of potential business cooperation. From the issue of remuneration, through potential acceptance procedures and reporting rules, to commercial goals and ways to verify whether they have been achieved. Particular attention should be paid to the issue of the possibility of terminating the license agreement, the possible reasons for such termination, the date on which the termination takes effect, and the consequences it has for the parties' previous activities, the content or goods produced, etc.

There is certainly no single standard "gaming license" formula. However, the agreements entered into in the industry have a number of unique, peculiar features. Awareness of how wide the spectrum of shapes and configurations of agreements of this kind is, can certainly prove to be an asset in practice.