These days, video games represent one of the best-performing entertainment categories, more than holding their own against TV, films and music. But their ascendance in pop-culture status has come at a cost—most of today’s market-leading titles have years of development time and millions in financing behind them.

This level of investment simply isn’t feasible for the many brand owners looking to create timely growth opportunities in the gaming space for their emerging IPs right now. So it’s really not surprising that game takeovers have heated up as quickly as they have in the past year. But before we explore the whys and hows behind this marketing strategy, it’s helpful to understand just how lucrative the video game industry has become.

New game+

Last year, the global gaming market generated more than US$180 billion in revenue, according to a February 2024 report from Amsterdam-based analytics firm Newzoo. And although that represents an increase of less than 1% over 2022, industry-wide consolidation hampered the sector from achieving more growth.

Mobile games accounted for 49% of this total take (US$90.5billion)—putting them neck and neck with games for home consoles and PCs at US$91.5 billion combined. However, it’s important to note the extent of diversification this industry has experienced in recent years. Revenue isn’t just coming from one-off purchases of new titles anymore—in-game spending on things like downloadable content (DLC) packs, subscriptions and microtransactions accounted for 43% of all video game revenue in 2023.

For lead Newzoo analyst Tom Wijman, one of greatest takeaways from his company’s report is that just 66 titles—many of which have been in the market for more than six years—accounted for 80% of all playtime logged globally last year. These behemoths, including Fortnite (8.4%), Roblox (5.9%) and Minecraft (4.3%), are the prime platforms brand owners should consider for game takeovers because their content is updated regularly and they have built-in fandoms that encompass millions of players.

Block by block

Celebrating its 15th anniversary this year, Microsoft’s flagship sandbox game Minecraft has sold more than 300 million copies worldwide since launching in 2010. Showing no signs of slowing down, the game development team at Mojang Studios continues to add new features and DLC on a monthly basis that players can access for free or purchase online through the Minecraft Marketplace.

Mojang first experimented with licensed collaborations in Minecraft back in 2012 when it released a first pack of 45 cosmetic skins featuring iconic gaming mascots such as Banjo-Kazooie, ‘Splosion Man and Halo’s Master Chief. Today, the team works with some of the world’s largest entertainment properties, including Star Wars, Disney theme parks and Jurassic World, to craft much broader and more engaging experiences for the game.

“Licensors appreciate Minecraft‘s vast audience and unique gameplay, which engages players across all generations, genders and demographics,” says Ada Duan, Microsoft’s GM of brand, growth and partnerships for the title. “Bringing popular partners into the game is one of the core strategies we use to reach beyond our existing fanbase and bring Minecraft to even more people.”

Licensed content can vary greatly depending on the nature of the partnership, notes Duan. For example, Mojang partnered with Hasbro in 2017 to allow players to dress up their avatars as their favorite Mighty Morphin Power Ranger, and then teamed up with the toyco again last year to create a set of NERF-branded weapons and minigames.

Minecraft’s most immersive experiences to date are its range of Adventure Maps, each featuring a new explorable world, skins, weapons and enemies based on a licensed property. And one notable collab in this vein was last year’s Teenage Mutant Ninja Turtles: Mutant Mayhem crossover, which featured a fully recreated version of the Turtles’ lair in Minecraft‘s blocky art style. On top of the added content, Mojang also crafted character quest lines for players to experience, such as training alongside Master Splinter and fighting against baddie Shredder on the rooftops of New York.

“We often time the content releases with pop-culture moments like a movie release or anniversary celebration, or with relevant global topics like sustainability,” says Duan. “The Minecraft team works with our professional creator partners to make fun and engaging gameplay, while our licensing partners share any themes or elements they would like to feature in the game.”

One key to the success of these brand-driven initiatives is leaning on the community of Minecraft creators who are fans of the featured IP to help build the experience, says Duan. This helps to ensure that the brand will be authentically treated and respected in the game’s development, and these fans/pros often contribute new ideas to make the gameplay and overall experience more engaging.

Paramount and Disney see Minecraft as a strong gaming platform for building brand affinity with kids for IPs such as SpongeBob SquarePants

New challenger approaching

While Minecraft‘s long legacy comes with a considerable base of regular players, that doesn’t mean there aren’t opportunities for brands to shine in competing games. One such title is Scopely’s multiplayer party game Stumble Guys, which jumped onto the free-to-play scene in 2020.

Heading into its fourth year in the market, Stumble Guys has racked up more than 700 million mobile/console downloads and generated upwards of US$275 million in total revenue. And despite the fact that Scopely only started getting into licensed partnerships last year, they’ve become an important new source of revenue for Stumble Guys, which has doubled its lifetime revenue since 2022, says SVP of publishing Eric Wood.

“We wanted to take a unique spin on game collaborations with Stumble Guys. For us, it’s not just about branded skins and cosmetics,” says Wood. “Licensors want players to immerse themselves in their favorite brands, and we can accomplish that by creating custom levels that complement the gameplay.”

Last year, Scopely launched more than 10 of these licensed levels, ranging from Barbie Dream Dash and NFL Scramble, to NERF Blaster Base and SpongeBob Block Dash. And it has also just released three Stumble Guys levels in collaboration with YouTube mega-influencer MrBeast that have become its best-performing crossovers to date. Unlike Minecraft‘s model, Scopely’s collabs only run for a limited time, creating immediacy for players to jump on the game.

All of its levels—including the licensed ones—are available to players for free, so Stumble Guys‘ core revenue generator is its monthly season’s pass business model. During limited-time events, players can purchase a “Stumble Pass” using 1,200 in-game gems (equivalent to about US$10). This pass lets them unlock 30 tiers of licensed cosmetics such as skins, emotes and character actions through gameplay. And if players don’t feel like they can complete all of the tiers in time, they can also purchase levels to upgrade the pass and unlock the rewards they want before the month is up.

Hand in hand with its Stumble Passes, Scopely also runs an in-game vault shop where players can purchase cosmetic items after the event is over if they missed out. (The catch is that only a select few of these will be available at one time, and the purchase price is nearly the same as the season’s pass itself.)

The company’s best-performing collab to date was last year’s activation with YouTube’s most-subscribed channel MrBeast, says Wood. The event ran for a month from August to September and adapted sets from the YouTuber’s videos into new levels, including a neon disco dance floor, a dangerous traps obstacle course and a race through his warehouse.

According to data from Sensor Tower, this event caused a 600% increase in weekly downloads of the game on the Apple App Store (surpassing more than 70,000 downloads). By comparison, Hasbro’s NERF collab sparked a 120% rise in downloads in April, while Ubisoft’s Rabbids franchise helped prop up downloads on Apple platforms by 20% in June.

Co-op benefits

London-based toyco Toikido took its first steps into gaming last year when it launched Roblox-first IP Piñata Smashlings with game developer Supersocial. It has been played more than two million times in year one, as well as hosting licensed takeovers featuring influencer magician SeanDoesMagic, the UEFA (Union of European Football Associations) Champions League and Cloudco Entertainment’s Care Bears.

From the outset, Toikido designed its Piñata Smashlings game as a vehicle for collaborations, aiming to build the company’s first in-house IP into a 360-degree franchise, says head of marketing Andrew Matjaszek. “Licensing was always something that we had in mind,” explains Matjaszek. “The advent of brand collabs on Roblox is still in its infancy, and it was our thought process that they were the key to building strong brand awareness in this overcrowded marketplace. It’s an opportunity to become popular through association with other evergreen brands.”

When both parties in a gaming licensing agreement can expand their audiences together, everybody wins, adds Matjaszek. One such example was Toikido’s partnership last year with family entertainment chain Chuck E. Cheese, which was keen to engage with Roblox’s 70 million daily active users through its first integration.

Supersocial adapted Chuck E. Cheese’s characters into Smashlings, as well as developing a new explorable island and adding a range of branded UGC items for players to collect for their avatars. Meanwhile, Chuck E. Cheese ran a three-month in-store Piñata Smashlings campaign across North America that included product sampling, signage, prizes and birthday parties.

And the cherry on top is that 5,000-plus screens in Chuck E. Cheese’s fun centers featured Piñata Smashlings animated shorts (produced by Nelvana), giving kids and families a first taste of the brand’s world and characters in advance of a full TV series that will debut late next year.

“It’s never been easier to launch an IP, but it’s never been harder to sustain it,” says Matjaszek. “We’re always looking to work with brands that are engaged with our core audience and have already stood the test of time.”

The LEGO effect

The LEGO Group has a rich history in the gaming market that dates back to the release of its first PC titles in 1995. But the Danish brickmaker made a big new move last year, entering into a multi-year partnership with Epic Games to develop a LEGO version of Epic’s free-to-play flagship game Fortnite.

The partnership was a perfect fit, since both properties rely on creativity and building as core elements of their respective play patterns, says Remi Marcelli, LEGO’s SVP of gaming and metaverse experiences.

Fortnite has become famous for its iconic Battle Royale game mode—where hundreds of players shoot it out until there’s only one victor left standing—but it wasn’t always a fighting game. When Epic first launched the title in 2017, the core experience was all about cooperating with other players to collect resources, build bases and fight to survive against a zombie-like threat. LEGO Fortnite is reviving these original game elements for the next generation of players, and giving everything in the world a brick-like texture that’s very on-brand.

The ultimate goal of LEGO’s long-term collaboration with Epic is to develop fun and safe digital spaces where kids and families can play together, says Marcelli. He adds that LEGO’s ongoing research as part of the Responsible Innovation in Technology for Children (RITEC) project has highlighted the importance of creating accessible and valuable gaming experiences. (According to RITEC’s phase-two report that was published in April, gaming contributes to childhood development by allowing kids to manage social connections, experience a sense of mastery and have freedom of choice.)

Within two weeks of its December 2023 launch, LEGO Fortnite had become the platform’s most-played game mode, reaching its all-time daily peak of 2.3 million concurrent users. And it continues to average more than 230 million active users each month, says Marcelli.

Epic has already rolled out several new updates to the core LEGO experience, including the ability for players to tame and recruit animals, create farms for resources, and explore new islands themed around Star Wars and LEGO Ninjago.

“There are many more exciting things still on the agenda, and we are looking forward to what comes next,” says Marcelli.

This story originally appeared in Kidscreen’s Q3 2024 magazine issue.