Issue #
29
Licensing Through Lorebuilding and In-Game Monetization Lessons

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As the Licensing in Games newsletter continues to grow, we're happy to announce that video games marketing agency Big Games Machine has teamed up with Layer to produce this and future issues. Their work with games companies from all around the world means they are knee-deep in industry news every day, making them an ideal partner for writing a monthly newsletter about the intersection of games and brands.

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A monthly look at the best examples of IP licensing in video games and the latest news on collaborations, brand partnerships and in-game events. 

Wargaming used to be considered a niche hobby for ‘geeks’, but the continued growth and success of Games Workshop’s Warhammer IP proves otherwise, with its latest licensed video game, Warhammer 40:000 Space Marine 2, surpassing five million sales in less than three months. What does the game’s success tell us about Games Workshop’s broader licensing strategy and how important has its rich lore been to its overall success? 

Elsewhere in this month’s newsletter, we look at the recent launch of Fortnite’s Kicks, a new cosmetic that lets players buy their favorite sneakers. A major, standardized Cosmetic launch such as this is a rarity, but it opens up new monetization and partnership opportunities for Epic Games and sneaker brands. That got us thinking: What could licensors and game studios monetize next? 

Below, we share our thoughts, along with the latest in-game events, collaborations, and licensing deals. 

Licensing Through Lorebuilding: Games Workshop’s Strategy for Successful Video Games

When Games Workshop launched its Warhammer 40k miniature wargame in 1987, it likely had no idea how huge this futuristic spin-off would become. In the decades since, 40k has transformed into a global phenomenon, with more than 40 licensed video games spinning out of the franchise, covering everything from real-time strategy games to gritty first-person shooters.

The latest licensed video game release, Saber Interactive’s Warhammer 40,000: Space Marine 2, has been a phenomenal success, surpassing five million sales in less than three months. This is obviously great news for Games Workshop, whose most recent trading update revealed that licensing revenue will have tripled by the end of 2024. So what licensing lessons can we learn from this Primaris of a franchise that have shaped its licensing strategy in the video game space? 

A rich lore appeals to gamers of all tastes and genre preferences 

The world of 40k can be dense and often confusing. Unlike its more traditional fantasy counterpart, Warhammer Fantasy Battle, 40k is a strange combination of sci-fi and fantasy with added sprinklings of niches, including Lovecraftian Horror, Dune, and many more. The rich lore of 40k in more than 400 novels based on the franchise, while official guide books (Codex) from Games Workshop provide the core details that every fan needs to know. Put simply, there’s a lot of material to pull from, making it highly malleable for media formats, especially video games. 

For fans of the 40k world, the term ‘GrimDark’ has been coined to define this unique environment that captures the fierce, cruel world these characters live in. However, despite this tone, the 40k universe is surprisingly diverse in the types of characters and environments fans can experience, whether it’s the instantly recognizable Space Marines, alien Tyranid swarms, or the Elven-based Aeldari.  

This means that there’s no one single ‘type’ of person that would enjoy this franchise. Instead, everyone can find something that will appeal to their interests. The official 40K website helps players choose their preferred faction according to their tabletop playing style and interests. 

Ultimately, this makes the Warhammer 40k IP adaptable to a massive selection of video game genres. In the ‘90s, EA dabbled with tactical shooters for its Space Hulk games, while publisher SSI stuck to the traditional Games Workshop formula with its turn-based Chaos Gate and Epic 40,000 games. In 2016, fans were treated to an arena shooter with Warhammer 40,000 Eternal Crusade, while the most recent Space Marine 2 is a third-person shooter drawing heavy inspiration from game mechanics in Gears of War. 

Strict rules for licensing 

The rich lore that Games Workshop and its fans have cultivated over the years means there are plenty of opportunities for game studios in the licensing space. However, working with Games Workshop and the Warhammer 40k IP comes with some stringent rules, as Saber Interactive discovered while developing their Space Marine video game franchise. 

Speaking to IGN earlier this year, Saber Interactive Chief Creative Officer Tim Willits revealed Games Workshop “has a system that runs content and assets created by licensees through an approval process, then dedicated staff at Games Workshop work with those licensees to offer feedback.”

Of course, video game development is a creative discipline by nature, but these strict rules mean there are some restrictions when working with the Warhammer 40k IP. As an example, lore restrictions mean there are certain character and armor types that are simply forbidden to wield certain weapons (such as Space Marines in World Eater armor being unable to have Sniper Rifles). 

Similarly, any ideas that might be considered ‘new’, such as specific attack animations for certain characters, are all subject to an approvals process. “And even when we're coming up with Tyranid attacks, they're like, oh, that Tyranid doesn't really attack like that, or that Chaos Marine, you can't have him do that. So we had to adjust things. And we pushed them a little bit. We did push them a little bit,” Willits told IGN. 

That said, these rules are in place for a reason. Games Workshop has spent nearly 40 years fleshing out the lore and world of 40k, and its most die-hard fans know that world inside out. If these fans experience anything that seems ‘off,’ it could result in backlash and negative PR for any games based on the IP. Similarly, strict rules such as these can act as a vetting point for potential licensing partners, as a fundamental understanding of the IP is required to start working on it, reducing the chances of weak games being released on the market. 

Mobile market presence keeps revenue flowing while opening up opportunities for collaboration events 

Mobile games generate 49% of the global video game industry’s revenue, but the market is highly competitive and finding success in the space – even for global franchises and AAA studios – can be incredibly difficult. That said, if you can manage to land a hit with a live service game, you’re setting yourself up for years of ongoing revenue growth through the sale of in-game items and subscription passes. 

There are plenty of mobile games based on the Warhammer IP (some of which are now inactive), but the latest 40k game – Warhammer 40,000: Tacticus, a role-playing strategy game developed by Snowprint Studios, is by far the most successful. It’s had more than five million downloads since its release in 2022, generating $67.5 million in revenue according to Sensor Tower data gathered by Layer. 

While most games experience a gradual decline in revenues after launch, 40,000 Tacticus experienced its biggest month in October 2024 when it generated $5.1 million in revenue, right off the back of Space Marine’s release on PC and console in September. 

This is a great example of how a mobile game adaptation of a popular IP can benefit alongside a mainline entry on console, PC, or other media formats. We saw the same thing happen with the Fallout video games after game purchases and downloads of different games in the series spiked following the debut of the Amazon Prime TV series (more on that in our Fallout Licensing S.P.E.C.I.A.L

12-month revenue for Warhammer 40:000 Tacticus - notice how the revenue starts climbing after the September release of Space Marine 2 (Source: Sensor Tower) 

We used Sensor Tower to examine all licensed Warhammer games in the mobile market available on the platform. The nine games we analyzed had nearly 23 million lifetime downloads, generating $109 million in lifetime revenue, with almost 50% of that revenue generated in the last 12 months (mainly from 40:000 Tacticus, which accounts for 61% of total revenue from Warhammer mobile games). 

The continued success of Warhammer 40:000 Tacticus, in particular means we’ll likely see more crossover events with Space Marine 2 as part of its ongoing LiveOps strategy, and we wouldn’t rule out collaborations with other games in the future. 

Fortnite Launches Kicks, Nike Kills RTRFKT - What’s Next for In-Game Cosmetics and Monetization?

Fortnite is arguably the biggest name when it comes to in-game partnerships and IP monetization, with countless character skins, emotes, and weapon skins based on well-known IP from Marvel and Nike to Dragonball and Avatar. But now there’s a new way to engage (and spend money) on your favorite IPs. Fortnite announced the launch of Kicks, a new cosmetic type that introduces sneakers to the Fortnite locker. 

This means Fortnite players can buy their favorite Nike trainers, such as Air Jordan 3s or Air Jordan 11s for 1000 V-Bucks ($8.99). The introduction of a new major Cosmetic such as this is a rarity, but it introduces an important revenue stream for Fortnite’s ecosystem, not to mention new partnership opportunities from the wider sneaker and streetwear scene that the game hasn’t collaborated with already. 

Of course, the new Cosmetic makes perfect sense. There’s a longstanding relationship between video games and sneaker brands, whether that’s Nike’s previous Fortnite collaborations such as the Airphoria Sneaker hunt, its virtual sneaker brand RTRFKT, or partnerships between companies like Adidas and Yu-Gi-Oh or Pokemon and Fila for limited edition Sneakers. 

It’s worth noting that Nike recently announced the closure of RTRFKT, likely spurred by the declining interest in NFTs and blockchain technology. Perhaps more importantly, Nike has much more to gain by putting its resources into Fortnite versions of its trainers rather than NFTs. 

This new Cosmetic means Nike can engage with Fortnite’s 30 million daily active users on an ongoing basis. It will also benefit from data on which sneaker variants are most popular with players, which could influence future design choices - at least in digital spaces. Nike will also be able to market new sneakers in a digital environment. If fans miss out on the chance to pick up a rare drop, at least they can get them in the game. 

All of this got us thinking about wider monetization opportunities for licensors in the video game space. Most IP integrations involve an IP-themed reskin of existing items such as weapons, character frames, vehicles, environments or in-game currencies. Sneakers seem like a no-brainer as they’re items that most video game characters wear - although there are some obvious restrictions for Fortnite’s Kicks which can’t be equipped on unsuitable characters, such as those with no feet. 

But what about eyewear? It seems like the most natural fit for a new standardized Cosmetic. A growing number of Fortnite Outfits include the option to toggle between glasses on or off, but we’re yet to see a video game embrace eyewear variants as a regular Cosmetic, all while companies such as Oakley and Gentle Monster are releasing video game-inspired frames. 

If Fortnite has found a way to monetize sneakers, we wouldn’t be surprised to see another major live-service game – whether it’s PUBG: Mobile, Garena or Call of Duty – find a similar opportunity in category-specific clothing. Being able to choose the latest luxury designer frames and equip them on your player for the world to see? 

There’s no shortage of innovation when it comes to IP integrations in the gaming space. But similar to how Fortnite has introduced a new major Cosmetic – it would be great to see game studios explore wider ways in which brand IP can be licensed into their games outside of the traditional character reskins, which often change a character’s entire appearance rather than just specific elements of it (upper body, lower body, accessories). 

In brief 

Here are some of our other favorite brand collaborations, licensing deals ,and partnerships from the last month. 

And in other news…