Publishers leaning on licenses

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.