Isn't the risk of new IP a myth?

We're constantly being told the narrative that launching new IP is too risky, and this is why publishers keep launching sequels.

But there are a ton of examples of new IP doing absolute gangbusters:

Watch Dogs is the current example, but also:

Assassin's Creed, Halo, God of War, Gears of War, Bioshock, Dragon Age

The first games in those series were big hits in their time, to name a few. If the game looks good, people tend to get hyped about it.

Some new IPs are succesful, therefore the risk is a myth... I think maybe you should consider that not every new IP is a success, just a subset. Risk doesn't mean that i's impossible to succeed, just that it isn't guaranteed.

For every success story of new IP, there are plenty of failures. But when you have a known and popular IP, it is virtually guaranteed to sell big numbers.

@tobbrobb: Sure, if the game isn't good, or you don't have the money to advertise it properly. But when the big publishers get behind something, I don't see how it's a barrier that it's a new IP. By contrast there have been examples of failures of established IP recently, like Gears of War: Judgment and God of War: Ascension.

Not really. There are huge sunk costs inherent in the pre-production required to fully-form a new property. If you're a responsible executive tasked with making the numbers go up, the choice between an unknown quantity and a sequel to something you have reliable and indicative data on seems fairly clear cut. Once these old IP's stop making the profits they used to, cut them and start afresh. I'm sad to say that the Activision/EA model is kind of the most financially responsible approach to game development out there.

On the flipside, Kingdoms of Amalur: Reckoning, Dragon's Dogma, even the majestic Sleeping Dogs did not do as well as Square Enix would have opened, despite the game itself being an utter joy. Bulletstorm is another good game which just didn't set the heather on fire in recent years. Bayonetta was one of Giant Bomb's favourites of 2010, it did enough to get a sequel picked up (but not by the original publishers but didn't do gangbusters. I'd say if you go back through the past generations games there are at least 2 flops to every new IP which caught on with the public, probably more, though I'll leave actually putting that research work in to someone with more free time!

@rasmoss: That proves nothing, every game release is a gamble. We can find successful and failing newcomers and oldies alike. But in the end a game with an established fanbase and a name in circulation will have a higher chance than a game that starts with nothing.

I'm not saying there isn't some truth to it, but we're at a point where someone would rather launch fucking Homefront 2 than come up with a new thing. On the flipside I think the fact that Watch Dogs is something new has really helped it, because the game itself isn't even that good.

Its cheaper and easier to market to an existing fanbase. Its easier to create new content while using a proven gameplay basis. Hell, most of the fans of a franchise will buy the sequel without waiting for reviews or forum discussion to figure out if its any good. It basically prints money. The video game industry is already near the level of Holywoods ability to deliver sequels like its toys from a factory.

It's not so much about new IP being a gamble as sequel is a safe bet. Before Ubi even begins making the next AC they already know pretty much what sorta sales numbers they will get, so they can spend money for that target. They also know that they're less likely to run into major development issues since they're building on a foundation.

When making a new IP you don't really have any way of telling how it will sell before you're pretty far into production and is able to do some real focus testing, and you're also most likely gonna spend much more time working on the technical side of the game which has a higher risk of delaying the game. Content has a very straight-forward predictable pipe-line and when you're making a sequel it's much less impactful if you end up having to cut some new feature because it's taking too long to make it functional.

@ares42: Yeah that's a good point. Just having baseline expectations and a core foundation to try and budget/time around is gold for an investor or a publisher. A new IP has less tools to prove themselves to the men with the money.

As much as I would like to see more new AAA IPs, I honestly can't blame any studio for deciding to use a licence or have their game be tangential to some established brand. Because that usually means, they have much better chance of getting decent numbers for their game, and we already have too many lay-offs attached to most AAA releases as it is.

A lot (if not all) of those are still very safe/marketable games.

I'm sure that actuaries have run the numbers and have determined a positive utility for using an established, well-though-of brand. Homefront 2 is a goofy exception that kind of confuses everyone.

The risk is in the difficulty to convince and sell your game with a new cast of characters, new stories, and a whole world you need to teach players about.

When a new Halo comes out a lot of the variables are already known to players, so they can make a generally safe purchasing decision without the need of a review. Whereas a brand new IP and game needs to be taken with more of a grain of salt to ensure it is what it claims to be.

That difference, plus all the money and time it takes to generate a new IP, is what makes them so risky. If the game does only moderately well it may not have been worth the cost as reviving or reusing an old franchise would have been.

To an investor, the unknown is always a risk.

Having do go through a full conceptual design process adds a large amount to the budget required.

One big issue is that when you're announcing your schedules to stockholders, you have numbers for existing IP. You can say that such and such sold x copies and got y critical response, so with a certain marketing strategy you can bump those numbers to selling z copies or whatever. Obviously this isn't necessarily true (like with Mass Effect?) but dropping several million dollars into an already established IP isn't going to cause too much of a bump in the stock ticker.

I'm not a particular business whizz, but I think the ideal situation is one where a business is diverse enough that they can offset risks from new IP with safer bets.

I guess what I'm getting at is that the idea of risk is as much about how the stockholders perceive it as it is about actual genuine risk. Investors are naturally more wary of things if they don't have any numbers that they can look at and feel comforted by!

I do kind of think you're right about it in a sort of pure way. The reality of development and marketing in the video games market means that all games get a lot more pre-release attention than say, movies. We might see an example of what a game is and whether it appeals to us as consumers as early as a year before it comes out, and what we see tends to give you a much more solid idea of what it is than stills from movie sets. Although I suppose it's mitigated a bit by it not being a field where individual people have as much impact on the product, so while we might tend to know we enjoy Ken Levine games or something, we know that the final product is dependent on 100 odd other people as well...

Tell that to Platinum Games. There only decent selling game was one in an established franchise.

@rasmoss:

The risk of new IP is that you have to spend tons of marketing dollars to establish the brand and mindshare. You can't buy a game if you don't know it exists and most game buyers don't bother to hang out on enthusiast sites like Giantbomb.com so it's hard to get their interest.

Ubisoft hyped Watch Dogs through the roof. I don't know what they spend to market new Assassin's Creed sequel but it feels like less than what they did for Watch Dogs.

It's cheaper (and therefore less risky) to produce a game that doesn't require explaining what it is to consumers. It's one reason Square Enix slaps the Final Fantasy name on just about anything they can.

No, it has always been risky to create new IP. The thing that has changed is that production is so much more involved and expensive where one could spend years working on a game for meager pay and lose years of royalties if it is a big flop.

Not really. As many people have said, it has nothing to do with the quality of the game and everything to do with how many people the executives think will buy it. And as someone else has pointed out, Watch Dogs and many new IP's are pretty easily marketable on their own. It's not easy to describe Transistor to someone who only has a surface understanding of video games. Watch Dogs is easily described with the phrase "Assassin's Creed plus Grand Theft Auto with some computer hacking stuff." You show a video clip of Watch Dogs and anyone who knows anything about GTA or Assassin's Creed will get a decent idea of what it is and they'll be more likely to buy it.

Of course that does say a lot about how bloated video game budgets are, but this isn't entirely a new phenomenon.

One thing these threads never bring up is the fact that this planet is still in a recession that started in 2008. The first few years the game industry boisterously claimed to be "recession proof," but as more and more studios shut down and publishers started squeezing the purse strings tighter, we've seen that this claim isn't true at all.

You see new IP when the economy isn't in the absolute shitter. When If things bounce back and the economy starts doing better we'll see the death grip loosen and publishers will be more willing to fund new IP/new ideas.

You can't blame them for wanting to hold onto what they've got. There is after all no real word on when in the hell things will get better.

A new IP is a risk, because if we get something new and original that we enjoy, you can bet your ass we're getting yearly sequels and spin offs at full price to milk the shit out of it.

But yeah, a new IP actually does take a risk, Activison spending so much money on Destiny is pretty damn crazy, considering that game can literally go either way. GTA5 makes sense for how much was put into it, but Destiny? Eh.....

It's Halo mixed with Borderlands, and the publisher gets to plaster "From the creators of Halo" on every advertisement I don't see it as much of a risk.

In sales, a new customer is several times more expensive than a repeat customer.

They amount of money it takes to establish a fanbase for a new thing is probably several times higher then selling a related thing to an existing fanbase.

From what I've seen it looks cool but is it 0.5 billion $ cool? Destiny was fucking expensive and much riskier than a new halo for exemple.

Yeah, okay, but counterpoint, remember Dark Void?

Of course you remember all the new IPs that were successful because you and everyone else has already forgotten about all the new IPs that were colossal failures.

@milkman:

There are no failed IPs. There are successful IPs and IPs that are successful when you reboot them years later on a wave of nostalgia (see Shantae).

it's not so much a myth, there still needs to be something relatable for the most common person to go along with a new concept. Like for example everyone calls Minecraft "playing with legos" even though the game itself has more going on then playing with bricks.

@video_game_king: So how long we got until the Boom Blox reboot?

@milkman:

That depends; are we going the Riddick route or the Kid Icarus route?

I was going to say "Depends if they are going the Prince of Persia route or Tomb Raider route"

For every IP that is a success there are prob 3 that failed. If a game is good, chances are unless marketing didnt do anything with it, the game will succeed. Naming the biggest success stories from new IP hardly shows that new IPs are not risky, or even somehow more likely to be a success.

Alright, I feel like I have overstated my original point. I'm not saying it's not more risky to launch new IP, just that I believe it's not to the point that some publishers seem to believe. Those of you who say that it's mostly about perception of the stock holders are probably right.

Obviously the I've picked and chosen the list I posted, it was only because I felt there was this idea that the first game in a new franchise can't do well.

I totally get why we keep seeing new Assassins Creed, Call of Duty, GTA and so on, but I don't really get why publishers will keep pushing franchises that are not even big sellers. Why not take the chance to actually have a huge success, rather than launch something that you know will just keep the wheels spinning?

But you're probably right that it's all about making a financial forecast you can count on.

No new IP does Call of Duty numbers. That's why.

Also, nothing does Call of Duty numbers, except GTA.

So maybe the new rule should be, unless you already are CoD or GTA, always do a new IP?

If you ask yourself any question that starts with: "Why would pubisher XY ..." you can be rather certain there is a fowchart somewhere telling them their decision makes sense.

@rasmoss: Risk doesn't mean "will never work."
The risk is ABSOLUTELY there. There is no question that existing brands sell better. I cannot think of a single debut that was successful and generated a recognizable IP that sold significantly worse the second time.

There is more risk involved with new IPs. Most of them are not super successful. Even good debuts aren't always super successful. Plenty fail because they lack traction in the market for one reason or another.

You have to make safe games so that the money can be generated to produce enough of a buffer against risk to produce new IPs. New IPs are exciting, but they don't sell well. Especially when compared to the 3rd and 4th iterations of a major franchise.

It's also not just about sales and revenue generated. Existing IPs usually have a technological backbone to work from, to work from. For example, the Call of Duty games had an awesome engine from Call of Duty 4, and that helped reduce the cost of making later games.

Having a name that the masses recognize is HUGE in sales. It's less important for the hardcore that populate forums like this, but we aren't always the majority. And even for us, we are often more excited about sequels to our favorite games than we are for IPs, because there is inherently more risk in investing anything, money or interest or hopes, in an unknown property.

New IPs are very important, and they help generate growth in the industry and push it forward as a medium. But that doesn't mean IPs are the best thing to do for every single project, because not all gamers are enthusiasts.

There are a lot of factors that go into it, but there really is a very significant risk involved with new IPs. But it's not that one sided.

I would agree that publishers could afford to take more risks. EA seems to be struggling a bit and they've done nothing but create sequels for a while now. More new IPs would be awesome and I genuinely believe that there is room for more.

I'm also partial to the reason that AAA game production budgets have skyrocketed since the beginning of the last generation of consoles.

The first Gears of War cost around $10 million to make back in '05.

First BioShock, $15 million in '07.

Brutal Legend, $24 million in '09.

God of War 3, $44 million in '10.

Rift, $50 million in '11.

Destiny, about $140 million in development and some marketing.

There was a rumor saying that BioShock Infinite cost about $200 million in both production and marketing, but Ken Levine denied that. Of course, we shouldn't be surprised if the development costs were somewhere near the $100 million mark. $50-$75 should be a good estimate.

If we look at the best selling games for each platform from the last generation and new to old IP ratio

Xbox360

1. Kinect Adventures! (pack in with Kinect) new
2. Grand Theft Auto V established IP
3. Halo 3 established IP
4. Call of Duty: Black Ops established IP
5. Minecraft new but hardly unknown when in arrived on xbox

Playstation 3

1. Grand Theft Auto V established IP
2. Gran Turismo 5 established IP
3. The Last of Us new
4. Metal Gear Solid 4: Guns of the Patriots established IP
5. Gran Turismo 5 Prologue established IP

PSP

1. Monster Hunter Portable 3rd established IP
2. Gran Turismo established IP
3. Monster Hunter Freedom Unite established IP
4. God of War: Chains of Olympus established IP
5. Grand Theft Auto: Liberty City Stories established IP

Wii

1. Wii Sports new (pack in with Wii)
2. Mario Kart Wii established IP
3. Wii Sports Resort established IP
4. New Super Mario Bros. established IP
5. Wii Play new

3DS

1. Pokémon X and Y established IP
2. Mario Kart 7 established IP
3. Super Mario 3D established IP
4. Land New Super Mario Bros established IP
5. Animal Crossing: New Leaf established IP

Out of these 25 games are 5 new IPs and if we look at the 10 best selling on each platform is the ratio 9/50. new IP can sell if they are novel enough (Wii, Kinect) or if they are from a well known developer (The Last of Us) but if you want a relative safe bet go for a known entity. source

@t_wester: You're not wrong but you're also saying that for a new IP to be successful it must compete in the Top 5 of sales.

@xalienxgreyx: It might be a bit reductive of me, my main point was that bar some exceptions are the most successful games sequels in one form or another. Can a game be successful if it just recoups’ the development cost and then some? sure, but I’ll bet you that most AAA developers are aiming at COD GTA numbers as evident by the Tomb Rater failed to meet expectation debacle of last year, (which is crazy btw.) to determine success.

I think its is smart of Ubisoft have begun to create these Ubi-art games that probably can recoup the investment without selling millions.

From a business perspective, if you have something that is still selling really well, you continue to sell it. When it comes to huge AAA games, there is only so much budget available to sensibly pour in to that stuff. It doesn't make any business sense to take a risk on new IP, even if the risk is relatively small as it may be utilizing a studio with an excellent track record.

Risk is not a myth when it comes to new IP. There is risk in quite literally everything; sure bets don't exist is business. But risk is a relative word.

I'm someone who doesn't mind an IP continuing game after game as long as it remains good.
Though when an IP has run its course it should END. Gears of War. I love 1, 2 and 3, they were all great. Judgement was just well not very good. The idea they're bringing it back after it's so clearly a dead IP, i mean gears 3 put the nail in the coffin story-wise. You could only really do prequel shit and fuck that.

Franchises like assassins creed, fallout, elderscrolls, ect. i'm 100% behind them making more. Is every assassins creed game great? NOPE, but its a really cool concept and generally fun mechanics that jump around between various interesting points in history. I'm all for that. I don't buy them launch day, but i love me some tower climbing and neckstabbing.

People getting pissy because theres too many sequels are jerks. Sequels to good things that stay good in the sequels are great. Hell in video games it tends to be the opposite of movies. Sequels are often better then the original game.

New IPs? Risky? Sure, of course they are. They usually fail because they suck, not because they're new. Thats not really a bad thing. Do you really want a new Haze? The risk of a new IP isn't so much "is it going to fail because people dont recognize the brand", its more "is it going to fail because it was a bad idea in the first place". A new IP isn't necessarily a good thing, a bad idea is a bad idea just because its new doesn't make it good.

How can anyone think it's a myth? Studios are falling left and right because of new ideas and new IP's.

Even the ones you listed, all of those games sales figures pale in comparison to what the sequels sold. A new IP will probably never sell as much as a sequel does and a sequel has the benefit of being a proven formula. You won't have to scratch development when it doesn't work out, you won't have to do as much research as before and so on. The first Mass Effect took more than 5 years to develop. The better selling and much more solid Mass Effect 2 didn't even take 3 years.

No, it is not a myth. No one is saying new IP's can't be successful. It's just risky. And it is.

Skylanders. I don't think anyone's risked more on any new IP than Activision did on that. Not only the cost of a dev cycle, but producing all of the hardware and toys, and asking for more than the standard game price. Activision gambled and won, but it could have lost millions.

Some new IP's are successful, therefore new IP being risky is a myth. This is the logic of the internet. You've been warned.

I mean, it's not just the risk it's also less work for a developer. All the lore, voice actors, gameplay systems, art style etc. are all in place. Some sequels also use the same assets and textures, so it's easy to see why teams may want to make a sequel

It's called risk because it's not definite -- a risk of failure implies a chance of success. It's a matter of risk management when you're publishing dozens of games every quarter. Big publishers do fund new IP's on top of expanding existing franchises, with varying ratios. It's just not safe to hedge all bets into a single thing, so they spread it out according to their risks. THQ ended up closing because they didn't assess their risks properly; they could have not commited so much on uDraw and got a return from their less risky sequels to known franchises being developed before they get in trouble (all of which turned out to be successes).

Edit: To think it in a videogamey way, this is a risk/reward game. Developing a new IP has a high risk of a high opportunity cost, but has a chance of a high reward of establishing a new franchise / having a unique product / critical acclaim. Like in a game, you shouldn't choose the high risk option too many times, or you will end up losing. You need to pick low-risk options once in a while to not die.

A risk? Not necessarily. Will it do as well as established IPs? Hell no.