Publishers leaning on licenses

By Brendan Sinclair, GameSpotPosted Jul 2, 2008 3:17 pm PT

Dragon Ball accounts for nearly half of Atari sales, whereas THQ reaps a quarter of its revenues from WWE, another quarter from Pixar and Nickelodeon.

It's no secret that big-name licenses sell games, but annual reports this week from THQ and Atari are putting into perspective just how much publishers depend on the intellectual property of others.

THQ in recent years has repeatedly touted its stable of million-selling franchises, but those games haven't always lived up to expectations. In particular, last year's Stuntman: Ignition and Juiced 2: Hot Import Nights fell short of expectations, so much so that THQ shelved both franchises indefinitely.

Fortunately for the publisher, its licensed games have been picking up some of the resulting slack. THQ noted in its report that games based on its three biggest brands--World Wrestling Entertainment, Pixar, and Nickelodeon--accounted for 54 percent of its net sales over fiscal 2007 and fiscal 2008. The same trio accounted for 47 percent in fiscal 2006.

WWE sales in particular have surged as of late, reaching $232 million during calendar 2007, or roughly 25 percent of THQ's total revenues. That dollar figure is up from $166 million in 2006 and $135 million in 2005.

The jump isn't entirely surprising, given that the WWE SmackDown vs. RAW franchise saw its debut on the PlayStation 3, Wii, and DS, whereas 2006 marked the first Xbox 360 edition of the game. Despite a lack of new platforms to expand onto, WWE sales may continue to grow thanks to the addition of a second WWE game on the release schedule, Legends of Wrestlemania, set to launch alongside the annual Wrestlemania pay-per-view event in March 2009.

Having sold off its internal development studios, fellow publisher Atari is also leaning more heavily on licensed games, specifically Dragon Ball Z. According to its annual report, Atari garnered more than 49 percent of its annual revenues for fiscal 2008 from Dragon Ball Z, compared to 45.7 percent in fiscal 2007.

Despite the relative increase in Dragon Ball Z revenue, the actual dollar amount that the series brought in slipped. According to Atari's own figures, Dragon Ball Z games brought in $39.34 million in fiscal 2008, down from $55.88 million during the prior year. The current year might be a better one for the license because last month Atari brought the popular franchise to the Xbox 360 and the PS3 for the first time with Dragon Ball Z: Burst Limit.

THQ and Atari share more than just a dependence on high-profile licenses. They've both been involved in legal disputes with the rights-holders of those franchises. WWE has been trying to have its licensing agreement with THQ voided for years and still has a case pending against the publisher, despite last year's dismissal of a separate racketeering suit. On the other hand, Atari settled a suit brought against it last year by Dragon Ball Z rights-holder FUNimation. That settlement cost the publisher $3.5 million.

43 Comments

  • K696969

    Posted Jul 14, 2008 1:28 pm PT

    We need more info on this game

  • LindBergh2007

    Posted Jul 8, 2008 9:55 am PT

    nappan. That's what causing the software market to decline. The market is being oversaturated with the same problems it had back in 1983 with every publisher trying to publish big name cartoon franchise titles, and over hundereds of dreadful movie titles or overhyped medicore material.

    Believe when I say this. This is a bad sign for the industry. If the price of games jumps to $70 soon(which I believe it will) and in a retail market being devestated by the slumping economy and inflation expect a possible collapse and sharp decline in software sales, and if the software titles stop selling then the 3rd party publishers will collapse and if there are little games to be released for consoles, how will this effect console sales? It could hurt them drastically.

    I 'm glad that both Madmangamer and Bigdaddy agree with me. I don;t want to be the prohpet of doom here but I want all of us to get real, it was problems like this that caused the 1984 crash. If we want to see the market get oversaturated with BAD multiplatform games and then try to sugarcoat it and say that this is okay and that all publishers should have the right to flood the market with garbage then we'll be the guilty ones if the market does crash before next year. People like Nate,Madman and Big Daddy and I are just looking out for the industry it's not adeqaute to be naive about a ecomony that is in reccession and where retailers are raking in historical losses on Blu-Ray DVD sales, the electronic market is being hit.

    All i'm saying is that you don't have believe me, but I hope you all don't ignore the warning signs I wish I could understand why some of the publishers have NOT learned from the crash era of 1983-84 that big licenses and little effort on developing B+ titles are what causes people to be turned off by games.

  • Narroo

    Posted Jul 8, 2008 5:38 am PT

    If only Atari could make a good DBZ game.
    Why can't a studio make a good game, why does it matter so much who makes the game?

  • GundumSage

    Posted Jul 6, 2008 7:32 pm PT

    @Cecalder

    People post these comments to relieve stress and vent. We know that, for the most part, our cries and please will go unheard if the companies/corporations/etc. are still making a quick buck off of the crap shelled out...

    No reason to get all sanctimonious on us crybabies, though...

  • cecalder

    Posted Jul 6, 2008 1:23 am PT

    Why are people upset at THQ and Atari. The fact that these licenced titles continue to sell well can lead to the conclusion that the people who continue buying them are enjoying their purchase. The notion that everyone must enjoy games that you enjoy is quite egotistical. If you don't enjoy these games, don't buy them. If you don't enjoy the state of the video game industry, don't play video games. Idealistic rants regarding the way you think the industry should run is of absolutely no consequence. Your efforts will be more useful if you take an economics class detailing the subject of supply and demand.

  • Skreb-Masters

    Posted Jul 4, 2008 9:33 am PT

    Since the dawn of time, 'casual' consumers have always leaned towards licensed products, because that's what they recognise. More people know about DBZ/WWE than Okami, hence why it sells more. I can't blame the publishers for making licensed games. They are businesses after all, and they need to make the money so they can produce the really good games (I hope).

    Brand recognition, it's a wonderful thing.

  • ps3thabest

    Posted Jul 4, 2008 9:02 am PT

    all the games are badass

  • Blaiyan

    Posted Jul 3, 2008 7:47 pm PT

    Seeing as how I own all the ps2 DBZ & Smackdown games I hope they keep making a profit. Looks like this years smackdown will hold some promise hopefully the next DBZ game will feature all characters plus something like a new movie storyline and villain or add something to the shows story in between all those missing years. Something like SW:TFU is doing for the star wars movies. Also dbz could use a serious graphic upgrade.

  • nappan

    Posted Jul 3, 2008 6:01 pm PT

    Those are some pretty sad numbers, especialy given that with the exception of a handful of DBZ games, none of those titles interest me at all. The lack of creativity and productive risk taking in the gaming industry is staggering, and dissapointing. Psychonauts was one of the few really innovative games in the last few years, and it's a console old. *sigh*

  • living_wmd_888

    Posted Jul 3, 2008 10:55 am PT

    THQ has always largely relied on licenses.

    That said, I've said it a million times: Licensed video games do no justice to video gaming. They are basically commercials for which gamers are paying $50 a pop for, and are no different than the cheap little toys you can find inside your Burger King Kids' Meal.

  • grigjd3

    Posted Jul 3, 2008 10:27 am PT

    While I'm not a fan of any of the titles mentioned above, I would like to point out that there seems to be just as many crappy non-licensed games as licensed ones.

  • Sagacious_Tien

    Posted Jul 3, 2008 10:23 am PT

    Thankfully, for the most part, all these games are decent, and it is working out for them as well.

  • BewilderedRonin

    Posted Jul 3, 2008 9:01 am PT

    So what if they use IPs? Atari has held the D&D license for years and I'd rather play a D&D game that uses "someone else's ideas" than some of the other horrendously stupid RPGs that are out there. To say that these games are crap because they use an existing IP is abhorrently ignorant. Baldur's Gate 1&2 are regarded by many as one of the best RPGs of all time and it used D&D IP. Besides, who hasn't, at some point in time, wished they could play the characters from their favorite TV show or novel? In order to do that, publishers must secure intellectual property rights.

    This isn't to say that devs shouldn't try to be original. There are many great, successful IPs that developers have created on their own. However, it is a matter of fact that it is usually easier for a developer to sell a game idea to a publisher using an existing and popular IP than to try and sell something with an unknown, self-created IP.

  • ZippyDSMLee

    Posted Jul 3, 2008 7:22 am PT

    Mass market mass appeal PABLUM FOR ALL!!

    Hitting a qaulity title in mass market CPs is like tossing rocks in the government and hoping to hit someone living, it can be done but its a rarity.

  • supernova777

    Posted Jul 3, 2008 7:05 am PT

    Yep this is true. I mean what other game do these two companies publish that you would actually buy into? Intellectual property -- big words. Mean these company can't think up there own story and make them reality. They take the next man's vison and make it a game that will sell because they know the fan base is already there. If they continue on this path in will spell there eventually ruin. As with madden no one like the same game re-hashed year after year with few new ideas in play. Good day I say. Good day indeed to you all.

  • mattcake

    Posted Jul 3, 2008 5:47 am PT

    And the problem is they dig up all the old games like AITD that so many of us had great memories of, and F it up royally, relying on the name alone to sell it. I always get the feeling developers dont try as hard with known franchises, whereas a new IP has to be good enough to demand attention in its own right, not because of its name.

  • peeweeshift

    Posted Jul 3, 2008 4:36 am PT

    Rock the dragon!!!

  • oli54321

    Posted Jul 3, 2008 3:55 am PT

    Hmm well I think Atari are pretty much screwed now since Alone in the Dark was so bad.

  • cooldude03

    Posted Jul 3, 2008 2:26 am PT

    The only title that I am even partially interested in out of this story is the WWE title. And personally I think it's to Madden'ized with yearly updates with minumum improvements. Why not give us downloadable roster and wrestler updates every 3 or 4 months? I'll pay. Oh I guess I answered that question myself, they won't do it because they want me to pay big, $60 big, every year. Legends of Wrestlemania will be a breath of fresh air. Although I still miss my old Nintendo 64 WCW vs NWO Revenge and WWE No Mercy, wrestling hits. there's hasn't been a wrestling game with that kind of great control sense the N64.

  • combatsoldier

    Posted Jul 3, 2008 1:25 am PT

    i like the games and it is no suprise to me how well they are doing. wwe has a fan base that is huge all around the globe. as for the dbz thing i just hope that they can keep there heads above water. the reason that dbz is slippin in sales is because they keep pretty much the same theme and hardly any new content. now this year for dbz was truly a treat and something special. adding the online feauture was genious and the graphics were solid. however there are some stuff that still needs improvement. on the other hand this was the fist dbz on a next gen title and i thought they did very well and expect even better next year. all i can say about this is good job to everyone and keep up the good work.

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