Develop the Real Power of IP from the IP Mania

IP is a very old concept. It first appeared in 500BC when the government of the Greek state of Sybaris offered one year's patent "to all who should discover any new refinement in luxury (1).” Nowadays, we all know that if you have a right IP, the profit from that is enormous. Just think about the IP of Star Wars which is worth 10 billion USD to Disney (2), and you would get the idea.

IP is not something new, but as the internet becomes more easily accessible and has been expanding its coverage across different parts of the globe, more and more people have the chance to create their own IP; some of them could become a big hit overnight.

Compared to the works people created in the past, with internet as a media nowadays, works including literature, game, and music have the ability to spread faster and wider with which the audience is growing much larger.

As game market continuously growing, there is a trend that more and more games expanding their IP to other categories, and vice versa. Not only movie, nowadays, novel and TV show derived from game IP create a full industry chain with great potential.

The power of IP can be seen from COMICUP20 this year in Shanghai, China. As the largest ACG fan art exhibition in China, COMICUP gathered 120,000 people this year, doubled the number from COMICUP16 and increased 30% compared to last year. Total 3,734 fan arts and fanfiction books showed up in COMICUP20 this year, increased more than 100% compared to last year (3).

To some extent, the popularity of the fan art and fanfiction reflects the popularity of the original IP.

Amount of Fan Arts/Fanfiction Books of Top 10 IP in COMICUP20

You can see in original IP from China (green) and Japan (blue) dominate the top 10. Western IP are also included in top 15, with Overwatch ranked No.11 and Marvel ranked No. 15.

It’s great that many originated IP had been created in recent years, and I’m glad to see many Chinese IP become more popular nowadays. At the same time, like what I mentioned in my previous blog post, I am pretty worried about the “blindly chasing the popular IP trend (4).” I also worry about the absence of a mature development strategy and standard of IP will lead to a larger bubble in IP market.

In the recent years, TV series and movies adapted from internet literature have been dominating the entertainment industry. In China, IP is consumed rapidly but not developed deeply. New York Times pointed out that 43% of the internet user, or 297 million people in China read internet literature in 2015 (5). Game companies are also competing with each other for the IP created by these popular literature. That makes IP not a valuable property but a good short term investment. One example is a popular TV series in China, Eternal Love. Even though the debate regarding plagiarism of this IP is still ongoing, the heat of the IP is going higher. Movie and game created from the same IP are attracting a larger audience, and market value of the media company that published the TV series increased to 0.73 billion USD (6), a 2000% increase compared to one and a half years ago before Eternal Love on air. This kind of “success story” lures media and entertainment companies, and that’s why when there is a new IP to hit the market, you can see “million” of similar IP created and flooding the market very quickly. With a readily available IP, game companies also tend to become “lazy” since they don’t have to be creative anymore on creating original IP, which makes the bubble growing even larger. What’s more, remember the plagiarism controversy I just mentioned? All these signs indicate the fact that overdevelopment of IP will run into issues eventually.

It’s true that IP can help game development in terms of lowering UA cost, increasing downloads, and enhancing immersion of the game. Also with more awareness of IP arising, people value intellectual property right more and the industry could go towards a healthier direction. IP is such a big topic for the game industry, that’s why I want to talk a little bit about how to work with IP here.

I believe value, influence, and long-lasting are the three traits of a good IP. A good IP is not only valuable in terms of creating profit, but also creating a culture, and the values are consistently created from both online and offline. The development of IP is not simply digging gold from it, instead, it is a process to continuously find the potential and create value out of it regardless of century, audience, region, or industry. Disney and Marvel are both good examples. Instead of quickly spreading their iconic IP to all industries to grab money, they develop their IP deeply and patiently over time. Now you can see their products in different industries including game, theme park, fashion, even food and beverage. The long-term strategy and cooperation across different industries bring benefit to this kind of IP, and generate more profit than the movie itself could have.

When different products are created from the same IP, some of them will be accepted by the public while the others being despised, or even lose existing fans of that IP. The reason is that in many cases, an IP is overdeveloped. The audience is smart enough to tell if a product is a tribute to the original IP, or just a money generator.

In my previous article, I stated that it is better for game developers to create their own IP (4). Now as the bubble of IP expanding, my opinion is reinforced by the unsuccessful cases that blindly chasing popular IP as well as by the success stories of original IP.

One good example of IP development is JX series, especially JX3, a traditional Chinese martial art MMORPG developed by Seasun Games. You can see JX3 ranked No.8 in the top 10 in COMICUP20. Due to the powerful in-game community system for group or individual, JX3 fan artists established a good relationship with JX3 developer and have been able to maintain this relationship. JX3 developer encourages the fans to create fan arts and actively interacts with them, and the potential of JX3 IP discovered by the fans is larger than it would if Seasun developed alone. With harmonious community and fans’ loyalty, JX3 IP has been successful in China for years.

A good community is a very important element for fan’s loyalty and is very important for an IP to succeed. By building a good community for the IP, it not only can create more value and influence, the new content continuously created by fans is the secret to making the IP really last for long. However, at the end of the day, what IP can do is only giving the player a familiar concept; what really matters for a game are still creative gameplay, high quality and attractive art style, immersive experience, and interactive community. These are built on top of the core capability and creativity of game developers.

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About Seasun Inc 

Seasun is a leading Chinese online games publisher focused on creating high quality games/game engines that push the boundaries of player experience in action entertainment. The company is also involved in small-medium sized investments for game studios worldwide. We have recently started up our U.S. studio in Redwood City, CA to create top quality content for the western market.

Seasun has shipped many successful titles, including the popular MMORPG series JX (http://jx3.xoyo.com/), the MMOARPG titles First Myth (http://fs.xoyo.com/index1) and CQ (http://cq.xoyo.com/), along with our FPS MAT (http://xd.xoyo.com/). The “JX” series has grossed more than $250 million and has achieved a daily active user count of 3.3 million. We are currently building a special team of highly talented people to create the technology for our next-generation MMOARPG at this studio.

About Magic Fuel Games 

Founded in 2015 and based in San Francisco’s East Bay, Magic Fuel Games is focusing on developing games that capture the imagination of players. With a core team of industry veterans, bringing decades of development and AAA experience from games that have captivated gamers around the world. The company's Series A was funded by Seasun Inc in February 2016 and has been growing its team and developing its 1st product since then. 

About Kingsoft

Kingsoft, Seasun’s parent company, is publicly traded in the Hong Kong Stock Exchange (SEHK: 3888) with market value of 3.8 billion USD. Kingsoft has created 3 other subsidiaries alongside Seasun: Cheetah Mobile (NYSE: CMCM), WPS Office, and Kingsoft Cloud Service. Kingsoft has over 4,000 employees worldwide.