What happens when you turn players into creators? Roblox’s business model is built on just that: a giant video game platform where players use Roblox’s developer tools to create their own experiences. Roblox’s video-game-as-a-platform model is so successful that other major studios such as Epic (Fortnite) are slowly repositioning their video games as ‘platforms’. Fortnite is no longer simply a battle royale game. It’s a platform where users can play various video games, from Epic-made experiences such as Fortnite Festival and LEGO Fortnite to thousands of UGC games made in Unreal Editor for Fortnite. 

The reveal of LEGO Fortnite was one of the biggest surprises from Epic’s new era of gaming announcement in 2023. This became even more exciting when the company later announced that Fortnite creators could build and monetize their own LEGO Fortnite Islands, with the agreement that The LEGO Group would take a 15% share of their Island payouts. Fortnite fans get to build the LEGO Islands of their dreams on the platform with LEGO assets, while The LEGO Group incentivizes and benefits from any successful creations. 

There’s a lot of money to be made in the UGC world. We’re still in the early stages of adoption, and platform owners are incentivizing players to move into development because they ultimately benefit from the success of any creator-made experiences or products monetized on their platforms. 

At GDC 2024, Epic announced it had paid out more than $320 million to Fortnite creators. As a comprehensive post from analyst David Taylor reveals: “There are 23,500 developers in total on Fortnite Creative, which means that you only had to be in the top 4% of developers to bring in at least $20,000 in annual income.” 

‍UGC has a bright future, but developers of UGC experiences, even on platforms as popular as Roblox, face the challenge of building and sustaining a player base. Incorporating a well-known IP into UGC experiences, such as LEGO’s licensing agreement with Fortnite or Kodansha’s UGC contest for Attack on Titan Roblox experiences, can help creators capture players' attention. With many of the highest-grossing media franchises in the world generating minimal revenues through video games, is there an opportunity here for licensors to open-source their IP for video game UGC? 

This question was recently explored in a post from Andreessen Horowitz’s head of games marketing, who said “The first S-Tier IP to fully open source its assets for games UGC will dominate the cultural zeitgeist.” Experts from all facets of the video game, licensing, and investment industries weighed in on the pros and cons of such a move. But in our opinion, licensors could but probably shouldn’t open source their IP for video game UGC. 

It doesn’t make sense for rights holders of the world’s biggest media franchises to open the floodgates and let anyone work on their IP. They’ve spent too many years building and cultivating a brand image. Putting your IP out in the wild risks devaluing that with experiences that don’t align with the IP’s brand identity and values. This is already happening with unlicensed UGC on Roblox. 

• Of course, there are caveats to that. This can work for the correct IP if there are restrictions. Just look at Wizard of the Coast’s Open Games License for Dungeons and Dragons, which lets players (of the tabletop game) create and monetize their own experiences “as long as they avoid reproducing official characters, settings, stories, and art.” 
• Similarly, IP holders could enter into longstanding commercial agreements with prestigious game studios, similar to Epic Games' work with The Lego Group. This is only possible with the right IP, though. In the case of Lego, there’s no cohesive lore or narrative, and the brand's entire identity is about imagination and creativity. This lends itself well to the sandbox nature of Fortnite’s engine, where developers can build their own experiences in a Lego style. 
• With reference to the above, it’s worth remembering that any such collaborations require extensive content moderation to ensure the associated IP is being portrayed in the right light. This requires significant resources. 
• The fandom for many of these S-tier IPs is already strong enough that countless fans are already making UGC across various platforms, whether in the form of player mods, fan-made games or cosmetic items. The biggest difference is that most of these UGC efforts aren’t mass market, don’t generate revenue, and don’t pose a risk to the overall brand. 
• Fans don’t need a license to create non-commercial fandom content, such as cosplay, fan art, or tribute videos. Popular IPs, especially within entertainment, get a huge visibility boost through fan content created by younger Gen audiences. According to YouTube’s 2024 Trends survey, 65% of Gen Z respondents consider themselves to be “creators”. 

That said, open-sourcing IP for video game development can work when it’s done in a specific way. A great example is Kodansha’s Roblox competition for Attack on Titan, which asked Roblox developers to create games based on the Attack on Titan IP. Kodansha then reviewed the game submissions and funded the winner's development. According to Kodansha: 

‍“The games developed for this project will be deemed derivative works of the original content, and discussions regarding ownership rights and permissions for use will take place during the interview process, contingent upon the content of the proposal.”

Considering there are no officially licensed Attack on Titan games currently on Roblox, this is an excellent way for Kodansha to assess engagement with the Attack on Titan IP on the platform without spending millions on R&D upfront. Through a competition mechanism, we believe this licensing model would work well for other license holders pursuing activations on game platforms where they don’t have a presence. But it comes with the caveat of long negotiations and a lot of paperwork at the end of the process! 

In our view, licensors are best off pursuing integrations with other popular video games if they don’t have any dominant games based on their IP currently on the market. 

Speaking of… 

It was only last year when media headlines were dominated by daily news on Roblox brand activations, partly fuelled by the media and entertainment industry’s obsession with “the metaverse.” Notable activations include Paris Hilton's Slivingland, Roblox NHL Blast, and Wallmart Discovered. While news of these activations dominated media headlines at the time and led to more than 50 million combined visits in less than a year, less than 100 people are currently playing all three of these games at the time of writing, according to concurrent user counts displayed on the Roblox website. 

Roblox isn’t the outlier here. Similar attempts by licensors to create their own games on Fortnite utilizing the company’s UEFN tools have struggled to keep players engaged. Shell Ultimate Road Trips, a Fortnite game developed for the oil company Shell, maxed out at 190 concurrent players ten months ago. Similarly, a video game promoting Honda’s new HR-V was met by an all-time high player count of six concurrent users. 

The problem here that many licensor holders are slowly starting to figure out is that building a branded experience on popular gaming platforms such as Fortnite and Roblox is no longer an effective PR or brand exercise due to the saturation of such activations in news publications. Maintaining a live video game (a brand activation) takes up a lot of time and resources, often resulting in a considerable player drop after launch as players realize no future content updates are coming. 

According to GEEIQ’s latest Virtual Brand Experiences report (more on that below), integrations with existing video games are becoming the preferred route of activation of licensors over creating original experiences. Brand integrations grew by 194% in the first half of 2024 and account for 28% of all activations across UGC platforms such as Roblox, Fortnite, The Sandbox, and Decentraland (note: this report focuses on virtual platforms rather than specific video games). 

We wouldn’t be surprised to see that number double in the coming years, as licensors follow in the footsteps of successful licensed integrations in the broader gaming space, where IP integrations are now a staple in some of the world’s biggest video games, such as Dead by Daylight, PUBG and Call of Duty. 

Some of the world’s biggest bands and artists used to activate campaigns on Roblox with original experiences in live concerts, but some of the most successful music activations on the platform as of late have been integrations. Charli XCX recently integrated into the popular fashion game Dress to Impress, while Glass Animals promoted the release of their latest album in a partnership with one of the most popular games on Roblox, pls donate, which has more than 2.6 billion visits. Dress to Impress peaked at 641k CCU when the Charli XCX collaboration launched (a 100% increase in 24 hours). 

So why integrate into an existing game rather than create a new and officially licensed experience?

Here’s why you can expect to see more integrations rather than original experiences over the next few years: 

Developers and publishers working with licensed IP need to recoup licensing costs. With video games becoming more and more expensive to make – not to mention increased competition in the market – this can be difficult. 

• Speaking of increased competition, players can struggle to find time for new games outside of the ones that they’re already invested in. A report from Newzoo’s 2024 PC and Console Market Report found older games like Fortnite account for over 60% of playtime. Why invest time into creating a new game when you can integrate your IP into a game with an established player base that’s already highly engaged and susceptible to monetization? 
• Live service (or games-as-a-service) is the dominant model in the video game market at the moment. This means that any new experiences on Roblox or any other gaming platform need to be treated the same, with regular updates scheduled into a roadmap. Players will quickly disappear if there’s a lack of updates post-launch (as there has historically been with most licensed activations on Roblox). The costs and resources required to maintain this make integrations a more effective way for license holders to enter the gaming market.