Tim Sweeney, CEO of Fortnite creator Epic Games, is one of the biggest advocates for the metaverse you’ll find. 

In 2021, he told Bloomberg: “The metaverse is a multi-trillion dollar opportunity.” At GDC 2023, he outlined Epic’s unified vision of the metaverse. When organizations such as Microsoft and Meta canceled their metaverse plans after waning interest, Sweeney publicly poked fun at those saying the ‘metaverse is dead’ by saying we should ‘organize an online wake for 600m monthly active users.’ 

It seems strange, then, that the announcement of Epic’s collaboration with The Walt Disney Company, an “all-new open, persistent and social universe that will bring Disney stories and experiences to life” in the Fortnite universe – doesn’t mention the metaverse once. 

Or maybe it’s not that strange. Maybe it highlights the long list of abandoned metaverse projects and associated redundancies (even Disney abandoned an internal metaverse project earlier in 2023) has led to negative sentiment around the metaverse. Of course, the absence of a unilaterally agreed definition of the metaverse only complicates things further, despite the best attempts by metaverse experts such as Matthew Ball to define it. 

While people continue to debate what is or isn’t the metaverse, video games and video game platforms such as Fortnite and Roblox are the closest thing to the ‘massively scaled and interoperable network of real-time rendered 3D virtual worlds’ that Matthew Ball describes. For now, video games are the most effective way for licensors to get their IP in front of millions of engaged users and tap into younger audiences. 

Fortnite, of course, is one of the most popular video games for IP integrations, having welcomed more than 150 IPs into the Fortnite ecosystem since its first crossover with Marvel in 2018. Disney owns a variety of IPs that have appeared as part of crossover events in Fortnite and will have seen (and benefited from) the sales of cosmetic items tied to these IPs, such as Star Wars skins. 

As such, Disney’s recent collaboration with Fortnite and the $1.5bn investment it announced is the logical next step for a company already so heavily embedded in the Fortnite ecosystem. Why would Disney build something from scratch when it can support and benefit from tapping into an existing ecosystem of more than 230 million monthly active users? 

For the time being, there’s not much information on how this collaboration will play out. Still, we suspect to see something similar to what Epic Games has done with Lego Fortnite: a huge Disney experience within the Fortnite ecosystem or individual experiences for specific IPs (i.e., specific worlds akin to Lego Fortnite for Star Wars, Marvel, Pixar, etc.). 

In the press release linked above, Disney highlights the success of its gaming strategy since it pivoted from an in-house developer to a licensor after closing its video game subsidiary, Disney Interactive Studios, in 2017. While some of Disney’s recent licensed games, such as Star Wars: Jedi Survivor, have been incredibly successful, others have not. Despite Disney’s best attempts at handing its IP to trusted studios, EA’s Star Wars series Battlefront failed to meet sales expectations, as did Marvel's Midnight Suns and Guardians of the Galaxy games. 

As the examples above highlight, attaching a big IP to a new video game doesn’t guarantee success. Releasing a new video game right now is tough. Time and attention are precious commodities, and any new video games need to entice people away from the live-service games they’re already playing, whether that’s Call of Duty, Fortnite, Roblox or PUBG. 

That’s one of the reasons we’re seeing so many licensors focus their efforts on licensing into games rather than licensing their IP to game development studios so they can create new ones. Sanrio’s recent integrations in the mobile space, which we cover in the story below, showcase how you can activate across multiple games at the same time in a variety of ways, ultimately increasing the appeal of your IP and the demographic of gamers you want to reach. 

As for Disney, this new collaboration is a de-risking exercise. Disney can focus its gaming efforts on building new experiences within the Fortnite ecosystem while being more selective with what it licenses in the wider video game market. Fortnite’s player base shows no signs of shrinking, especially as Epic continues to roll out ambitious roadmap plans for its Unreal Editor for Fortnite (UEFN), encouraging more developers to build experiences in the Fortnite ecosystem. And you can expect Fortnite’s install base to grow even further when it becomes available on iOS in Europe. 

That said, one of the biggest challenges for new developers in the Fortnite ecosystem is pulling people away from the main Battle Royale map in the game. Yes, Fortnite has millions of players, but most of them are playing Battle Royale. While UEFN means licensors can build branded experiences on the platform, engagement levels for such experiences are incredibly low. BMW’s Fortnite experience peaked at 354 players, while Liquid Death’s peaked at 64 players and has now been deleted. As payout metrics for Fortnite UEFN experiences are based on engagement levels, estimated earnings for these experiences are almost nil. 

While it may be tempting to follow the money and start launching experiences in Fortnite off the back of this, we’d recommend pursuing IP integrations in the wider gaming market, such as LiveOps events in mobile games. Speaking of… 

Sanrio, best known for the Hello Kitty IP, is no stranger to the world of video games. To name just a few, there’s a Hello Kitty virtual pet game, a Hello Kitty management sim, several Hello Kitty puzzle games, and even a Hello Kitty cosy adventure game bearing a striking resemblance to Animal Crossing. That’s without mentioning the various limited-time integrations that have taken place in mobile games over the years. 

Most recently, Sanrio kickstarted its year with not one but three IP integrations into popular mobile games: Ni No Kuni Cross Worlds, Identity V, and Puzzle & Dragons. While you may not have heard of these games, they’re incredibly popular in China and Japan – which is where the Hello Kitty and other Sanrio IPs are most popular (all the data below comes from SensorTower). 

Ni No Kuni Cross Worlds, a mobile RPG based on Bandai’s popular RPG series, has 35k daily active users and made $2m in February. Puzzle & Dragons is one of the most popular puzzle games on mobile with 670k daily users generating $12.6m in revenue in February, while Identity V, an asymmetrical survival horror game developed by NetEase, has 1.1m daily active users and made £13.9m in revenue in the same month! 

We wanted to focus on these integrations because they highlight the various ways in which IP can be integrated into mobile games, even if your IP and the game/genre might not seem like the best match at first glance. After all, how many of you would associate a cute animated kitty with a survival horror game? 

The Identity V and Hello Kitty collaboration ran from December 28 – January 24, introducing skins and pets into the game themed on Sanrio characters. ‘Themed on’ is the important phrase here: rather than integrating like-for-like appearances of Sanrio characters, the game’s main characters got a makeover with Hello Kitty and Cinnamorol-themed skins, as well as a limited-time event currency, ‘Cinnamon Rolls’, to spend on in-game items. 

In Ni No Kuni Cross Worlds, the crossover event with Sanrio ran for 28 days from December 20, welcoming a variety of Sanrio characters into the game with an animated appearance matching the game world of Ni No Kuni. Sanrio’s IPs were integrated across a variety of in-game cosmetic items, such as summonable characters, music and collectables, alongside Sanrio events and mini-games. 

Perhaps the most impressive of all these collaborations is the Hello Kitty integration in Puzzle & Dragons. Running from January 15 – January 29, the popular puzzler integrated Sanrio IPs such as Good Day Hello Kitty, Kuromi the Great King, Sea Wolf Pochacco, Nautilus Kerokerokeroppi, Blackbird Bad Badtz-Maru, and Wish Me Mell, which could be unlocked through the game’s Egg Machine gacha system (randomized pulls). 

It wasn’t just items that were introduced, though. Eight new dungeons (essentially stages) themed on Sanrio IP were added to the game. This is a great use of the Sanrio IP as it incentivizes engagement with the Sanrio characters in themed levels while also pushing the unlockable cosmetic items, as you earn rewards to unlock the gacha pulls by clearing these levels. 

To incentivize spend, limited-time bundles based on Sanrio characters were also introduced to the game. Prices started at $0.99 for one Magic Stone (premium currency) and one pull from the Egg Machine. Unlocking all of the Sanrio characters requires a lot of gacha pulls, so players could also purchase bigger bundles for $29.99 that included guaranteed characters and multiple pulls. The gacha-focussed nature of Puzzle & Dragons might explain why the average revenue per download (RPD) is a staggering $92.61. 

While sales data for the Sanrio items isn’t available, we know the total player spend during the event was $5.9m. The Sanrio purchases probably made up a large portion of that!