Episode 65: More Than Just a Name – Leveraging IP in Mobile Games with Rovio’s Kentaro Sugiura

Introduction

Jon Jordan: Hello everyone, and welcome back to the Mobile Games Playbook. Thanks for tuning in for another episode. This is a podcast all about what makes a great mobile game, what is and isn’t working for mobile game designers and all of the latest trends.

I’m your host Jon Jordan, and I’m very pleased to have joining me today—in fact, joining me and coming back for the second time on the show—we have Kentaro Sugiura, who is the lead User Acquisition (UA) Manager at Rovio. How’s it going?

Kentaro Sugiura: It’s good to be back here, and I’m ready and happy to discuss mobile games again.

Jon Jordan: Good. Yes. Raring to go. So, last time, obviously, you were talking about your main job in marketing and user acquisition, and today it’s indirectly linked, talking about Intellectual Property (IP). So, obviously, that’s a key part of a product in mobile games and has a very strong link through into user acquisition. So, you’re sort of using your foundational knowledge there and going to talk about how IP works.

The rise of IP in mobile games

Jon Jordan: So, why have we seen an acceleration in mobile games using IP, typically external IP? Why are we seeing this massive trend? What’s it doing to the mobile games business? How’s that helping you in terms of user acquisition?

Kentaro Sugiura: I think there are two scenarios when it comes to mobile games using external or existing IP. The first scenario is the game with IP. The biggest benefit of licensing the IP is lowering marketing cost. Now, this happens through stronger UA metrics such as a higher Click-Through Rate (CTR) or conversion rate, which is nicely reducing the Cost Per Install (CPI), as well as higher traffic driven by brand recognition. That is the first scenario.

And the second scenario, which we see more often nowadays, is a LiveOps or game event with IP. So, when you develop or license an IP for a limited period, the main benefit is boosting revenue through LiveOps. This means a limited-time event with IP. Typically, the IP content is only available for a very limited time or a set duration, which uplifts game revenue. We often see additional organic installs or returning user uplift happening because of the LiveOps event with IP.

UA vs. LiveOps: Two approaches to IP

Jon Jordan: Broadly, in my head, those two become the UA part that, I guess, is targeting new players. And then the second part, which is more the LiveOps events, is more to do with the existing player base. Would that broadly be the case? Or, I mean, how much crossover between those two audiences can you get with using IP?

Kentaro Sugiura: Yeah, I think the first case is more new-user-oriented or more of a revenue prospect through user acquisition. And the second is a kind of mix. Sometimes you unlock your untapped audience by having LiveOps or game events with IP, but also you expect a lot of returning users because you do something new, something special.

That’s one of the benefits of having IP in your game for a limited length of time.

Jon Jordan: I guess there is a bit of a crossover in the sense that you could have a live event, and then you can obviously use the IP you’re licensing for that event. You can also put that into your main UA marketing funnel for at least the period of time in which that’s happening. So, there is some synergy between the two, even if broadly they are seen as being different.

Kentaro Sugiura: Yeah, exactly.

Jon Jordan: I guess the other main thing, if you’re thinking about these two different use cases, is that the UA thing would be more about a longer-term marketing effort. So, you might be doing a game and using other IP in that game, whereas the live event stuff tends to be like a faster turnover where you’re having live events every month or something. So, I guess that’s the difference in terms of the broader new users and the existing users, which relates to retention and monetization.

Kentaro Sugiura: Yep.

Evaluating and selecting the right IP

Jon Jordan: So, when it comes to IP, it is kind of funny. I was thinking that probably when games started out, even some successful games weren’t really seen as IP, and now everything is IP. So, it’s interesting how media works these days, and there are so many different channels to put IP in that everything just becomes IP.

So, the question is not really, is there good IP and bad IP? I guess the question we are thinking about if we have a product is, how can we get the most return on investment on that? How is that IP best suited to our audience?

So, how do you think game developers or people running mobile games should be thinking about finding good IP that works for their product and their audience? What’s the sort of process you go through? Do you go through looking at demographics? Is it just obvious that if you’re doing this sort of game, this sort of IP is going to work? What sort of process would you go through for that?

Kentaro Sugiura: So, from my experience and my observation, I see two key directions when evaluating potential IPs for mobile games and collaborations. The first direction is affinity. This means collaborating with a brand that already shares strong similarities with your existing audience. And this strengthens engagement and monetization with your core audience base. That’s the first direction.

And the second direction is expansion. This means you do a partnership with a brand that allows you to reach a new or untapped audience. That will broaden your market and help acquire new users beyond your current demographic.

Balancing affinity and expansion

Jon Jordan: Where do those two sit in your previous example where you’re doing one more focused towards new users? You said there’s the affinity, sort of reinforcing what you’ve got, and then expansion. Do they fit easily into those buckets?

Kentaro Sugiura: Yeah, I think it’s really case-by-case, IP by IP, and game genre by genre. Maybe if your game audience is, let’s say, female, 45 plus, the affinity you may find is some brands or IPs which are appealing to that core audience. That’s one example.

When it comes to expansion, it means if you do the partnership with an IP which is appealing to a different demographic. That’s a separate direction. And sometimes it can be a mix of these two directions. Sometimes affinity with a little bit of expansion. So it really depends on the IP and your core audience.

Jon Jordan: I’m imagining the expansion part is the harder one to do because the affinity one is, everyone knows the people who like this are going to like that. I mean, I’m sure there are some edge cases there, but basically, it seems like people can work that out.

Whereas the expansion, because it’s just a wider opportunity—how do you… because you want it to be expansive. You want an expansive IP collaboration. You don’t want an IP that sort of appeals to your existing community; you do want to reach out. But obviously, you don’t want to go massively reaching out to something that’s too far and has no affinity at all. So you still need some affinity.

What’s the process you work through on that? Because it seems that could really be where you optimize things by finding an IP that really expands your audience that maybe other people haven’t used if they’re in that same game genre. Is there anything you can sort of explain about that process?

Kentaro Sugiura: Yeah, so I think affinity often happens with entertainment content such as movies, anime, or comics, while expansion—yeah, it can happen within entertainment content—but it also can be happening with existing famous movie stars or football players. You know, it’s a little bit outside of entertainment content. So, it can also be some event, an offline event, or some organization.

The expanding IP landscape

Jon Jordan: We haven’t really talked about IP broadly, but now the range of IP is so enormous. Like you’ve been saying, individuals like sports stars are now at the same level as film stars, and there are loads more film stars and TV stars because there are loads more different channels. So you have all these different celebrities now who are just sort of famous for being famous, and that’s before you move through the movie IP, all the anime stuff. Obviously, enormous numbers there, being used more all the time.

How, as someone who’s sort of looking at what IP to license, do you just not get overwhelmed by just the massive range of what’s out there? Because it’s not just, you know, it used to be, ‘A movie’s coming out, so we’ll get the license for that movie and we’ll work on that content for the next six months, and when the movie comes out, our game will come out.’ People still do that, but I imagine most of the licensing that’s happening is not around big blockbuster movies anymore.

Kentaro Sugiura: Of course. Like, you know, if you can align a key beat with IP and, you know, you can capture the momentum, that is the best option. However, usually it’s a little bit challenging to do that because usually the negotiation of partnerships with existing IP can take so long that you might miss the momentum. Of course, that’s the optimal scenario, that you can align a key beat with the IP.

Negotiating and timing IP collaborations

Jon Jordan: All these things are sort of how long’s a piece of string, but the sort of level you’re working at, how long do those negotiations take? You imagine things have sped up a lot just because of the way intellectual property systems work now. But in terms of thinking about something and then getting something agreed and getting it into a game, is that still a process of months rather than weeks?

Kentaro Sugiura: Yeah, I think they’re months. So, I can share more of my experience from the UA side, because we need to prepare creative with IP and we need to get approval from the IP holder. So we usually spend three to six months in advance preparing the campaign from the UA side.

Maintaining player excitement

Jon Jordan: What do you think about this idea of how much new stuff can you get into your mobile game in a year? At what point does it just, you know, something at the start becomes exciting, there’s this new event coming or new characters or, or whatever IP your licensing comes into the game, and at what point does it sort of become, “oh, another one?”

Kentaro Sugiura: Yeah. It’s like you don’t feel something is special, is that what you mean? I think it depends on, you know, how you implement IP in a game and also how you structure the event with IPs. So it really depends on that.

From my observation, I see, for like, you know, one or two Japanese game developers, they’re constantly doing IP collaboration, like a LiveOps event. And, I see each time they announce the IP collaboration event, there’s some spike in terms of install uplift and revenue uplift.

Jon Jordan: I guess it depends a little bit on the genre ’cause there’s some genres who rely on having real world brands constantly in their game. So, you know, in a sense they are games that are fundamentally built on always having IP in their games. But there’s other games maybe, on the RPG side where it’s harder to get real world brands in there.

So there’s a different cadence that depends on what type of game you’re doing anyway.

Kentaro Sugiura: I think it also depends on how you collaborate with IP, is it just characters or do you prepare some special live event or stage, where people feel like “oh, this is the IP theme event.”

So this really depends on how you structure the event with IP.

Competition and reusing IP

Jon Jordan: What’s your view on games having IP that other games have used? Is there a point at which external IP has been used so much in so many games that you feel like, “Well, they’ve done it.”

You’re looking at what your competitors are doing all the time. They’ve used that IP, so now we can’t use it. Or, if you see a competitor has done a really good IP integration and had a massive spike, do you go, “Oh, maybe we should be looking at that”? I mean, how much of this is driven by competitive trends in the industry, where people are looking at what everyone else is doing, versus how much is it just that you’re focused on your product?

Kentaro Sugiura: Sometimes, for example, the IP holder will reject your offer because they already have a partnership with your competitors. So, this is something that we cannot control ourselves. It also depends on the IP holder. Some of them can say it’s okay to have similar partnerships or collaborations with similar products or a similar agenda. Some of them want to be limited in that sense, so it really depends on the brand.

But yeah, I think in general, you’d like to avoid a brand that already had a collaboration or partnership similar to your product because you might not see the result you are expecting.

Jon Jordan: And so, in contrast to that, if you have a really good collaboration with a brand, the point becomes, “Well, we should be doing this again,” because our audience really liked that; it really worked for us. So, I imagine to some degree you’re cycling through these collaborations—we think about this more on the live ops side. You’re cycling through these different collaborations, and some of them work better than others. If you find something that works, do you then think, “Right, we can do that again?” Or, do you think these are more sort of one-shot type things, where you’re going to create audience fatigue if you’re repeating the same tie-ins?

Kentaro Sugiura: I think it really depends on the contract you have with the IP, is it something you can do one more time, or do you need a new contract with them? And yeah, I also see it’s kind of a throwback event in some mobile games. So, it definitely can be an effective way to uplift revenue by doing that.

I also recognise that in some cases, they do different LiveOps events with the same IP, but with a different event structure, based on the learnings from the previous event.

The business impact of IP

Jon Jordan: And how closely do you focus on the financials of the overall thing? Because I guess that’s… I mean, mobile games are fun for people to play, but obviously, behind the scenes, there’s a massive business.

So, as you stated at the beginning, the point of using IP is in some ways increasing the efficiency of your business, either by reducing your marketing costs on a per-download or install level, or it’s increasing the revenue you’re generating. While these things are fun and exciting for the players, and maybe even the dev team, the economics of it is what’s running that. So, how does that sort of play into the way you think about using IP?

Kentaro Sugiura: I’m echoing what I just said. So, IP has two benefits, the first is lowering the marketing cost. That can happen by uplifting funnels such as CTR (Click-Through Rate) and conversion rate, which leads to reducing CPI (Cost Per Install). It’s also because, when you have an IP, you get better organic installs. That’s one part of the business impact.

Another part is uplifting revenue. This is generally a practice that happens during limited-lifetime events, like in-game events. So, I think it really depends on what you want and also your game’s genre. For some genres, they have less of a problem with generating revenue, and it’s less dependent on LiveOps. Then maybe it’s better to focus on the marketing cost side. Other games are okay with the marketing cost and CPI, so they focus more on the revenue play from LiveOps.

Future trends and the Asian influence

Jon Jordan: What do you think are the trends that are happening over the next five years? Do we just see more and more collaborations because IP has become more fragmented, and so there’s more opportunity? Or are we starting to get to the stage where there is a bit of general fatigue around these mashups, not just in games, but in all of culture? What’s your view on how that trend is going to develop over the next five years?

Kentaro Sugiura: I have no idea, but I’m just saying this based on my observation. IP collaboration is a very popular LiveOps strategy among Asian game developers. I see many Japanese mobile game companies have regular, frequent LiveOps events with anime or manga IPs.

It is very popular in Japan, and IP-based games are really popular there. Now, I see more and more Western mobile games having LiveOps events with IPs. We do see a lot of this with Brawl Stars or Monopoly Go. So, that’s my observation, and based on this, I expect that this will be happening more often.

Jon Jordan: I think that’s a good point because even in my limited experience, we have really seen over the last few years a sort of global expansion of what was at one point quite niche. Japanese manga and anime characters have progressively become much more widely viewed across the West, through services like Crunchyroll and all that sort of stuff.

And because that genre of media is really all about collaboration. The history of anime and manga is all about coming up with new things and cross-pollinating them. So, if you are in that genre, like you say, the JRPGs, it’s almost like it’s expected that you have this very fast pacing of collaborative IP because that’s what the underlying medium is all about. So, it is interesting. For some genres, I think, they will probably, as you say, just keep accelerating, but maybe not for all other genres.

There was one other thing I was going to say, particularly around meme culture, which is obviously a similar thing to Japanese anime, where it just explodes so fast. And we’re seeing this in things like Roblox now. I wonder if those IPs just get so popular and then the next thing comes along. Can those IPs be used by more traditional mobile games? They burn so fast, and it’s hard to judge how long they’re going to last. So, you have that issue.

Kentaro Sugiura: I think you’re having a really good point. I think from the Japanese anime and manga perspective, collaborating with different IP and other entertainment can reach an untapped audience, especially in our Western market. This is because Japanese anime or manga have really limited distribution channels.

One example: in Japan, if you turn on the TV, you can see anime all the time. While in Western markets, you probably need to go to a special channel or pay for cable TV, or maybe you need to subscribe to one of the streaming sites. So, the distribution of Japanese anime content is very limited in the Western market. And we are collaborating with different games. It can be a good distribution channel to reach their potential audience.

Jon Jordan: The history of gaming has shown that the trends that happen in the Japanese market tend to be the ones that flow globally. So, I guess from that point of view, we would think that the trends are going to end up more like the Japanese market than less like the Japanese market, because that’s just historically how the games market has developed over time.

Kentaro Sugiura: It might be, but still, it’s very difficult to predict what’s going to happen in the future. But yeah, so far, we kind of see this trend is mostly moving from the Asia market to the Western market.

The case for building your own IP

Jon Jordan: To sort of flip it the other way: Do you think there is any space for people to still run successful mobile games where they are trying to almost keep a purity of their vision and not want any external IP? Can that work from a user acquisition point of view where you just decide, “My IP is what I want to focus on. I don’t want to dilute that with anything else. I really want to build my IP, at least in the early stages”? So, you sort of go the exact opposite of maybe what the trend is and just go, “My game is my IP, and that’s what I want to focus on.” Does that make any sense at all?

Kentaro Sugiura: I think so, yeah, because some of the genres don’t require external IP, or maybe the effect of such IP is very minimal. Some of the genres are more about your experience in the game; they are not about the IP. You can say that classic, evergreen games like Sudoku don’t really collaborate with IP—the effect is quite minimal compared to other casual titles, like Match-3 or other casual genres.

AI and the future of original IP

Jon Jordan: And I guess, because we can’t have any podcasts going out without mentioning AI, the interesting thing if we are thinking about building your own IP from the ground up is something like Gen AI and user-generated content. That, in some ways, is allowing your community to create their own IP from the IP that you are creating.

So, in a sense, maybe the converse trend to more IP licensing and media going everywhere is some people creating their own striking brand and then allowing their community to expand upon that in a way that they couldn’t have done previously, because most of them wouldn’t have had the art or production skills to do that. So, you do have this sort of flowering of IP, even if it’s a mashup of external IP or people really expanding their own universe of IP. So, in a sense, everything becomes a Marvel universe, which is the end result. We get IP everywhere. So, maybe that’s the counter-argument.

Kentaro Sugiura: Maybe next time, you know, in one or two years, we can talk about how we have a completely different opinion on IP!

Wrapping up and key takeaways

Jon Jordan: Okay, well, I know we’ve painted some broad strokes across what’s going on in the use of IP. I guess as with every tool in the business toolbox, people should definitely be thinking about it if you’re doing mobile games, even if you’re not going to use it.

I suppose that would be the conclusion of this, that there are lots of big brands, and there are lots of little brands. Maybe some companies are not big enough to interact with the bigger brands, but you should be thinking about at least how this could interact with your audience. Because it’s clear that for companies like Roblox and for pretty much every mobile games company, you are using IP to improve your business and make your players happier. So, everyone should be thinking about it. I guess it’s just the question of exactly how you want to deploy it. Would you agree?

Kentaro Sugiura: Yeah, I agree.

Jon Jordan: Any sort of final advice for people who are thinking about IP? What are the things that have resonated with you that are the best working practices?

Kentaro Sugiura: It’s always good to have a high affinity with IP. If you’re looking for more affinity-type IP, then do some user research and try to understand which brands are the most familiar to your core audiences. And maybe, for expansion, what is the audience you’d like to bring in? And yeah, that’s the most important thing: You have a hypothesis, and you make a business case based on that, so you have a clear business goal.

Jon Jordan: Good. Good. Well, thank you very much, Kentaro, for your advice and your expertise.

Kentaro Sugiura: Yeah. Thank you for having me. I hope this helps to understand IP and mobile games!

Jon Jordan: And thanks to you for watching, listening, however you are consuming the podcast. Never forget to subscribe so you don’t miss any episodes. Come back next time to see what we are talking about in the world of mobile games. We’ll see you next time. Bye-bye.