Over the past few years, cross-platform entertainment has continued to attract a growing amount of investment. Given how challenging it is to create enduring IPs, rights holders are constantly looking for new ways to engage their captive audiences. The appeal of enduring IP is the reason that we have seen 21 iterations of Call of Duty, 34 seasons of The Simpsons (2 more are in the works), and 31 Marvel Cinematic Universe films (11 more in development).

Finding narratives and characters that resonate with a broad audience is imperative to top tier entertainment. These iconic pieces of IP end up serving as cash cows for years (if not decades), as they have become some of the most prominent and valuable brands in the world.

As the above shows, companies are naturally incentivized to extend the lifetime value of their top IPs. While sequels always have the potential to damage brand equity (i.e., a poor sequel could dilute or endanger the IP’s longevity), they often present a favorable risk / reward profile through the loyalty of a passionate audience.

Most of the franchises in the chart above have been particularly strong at retaining the attention of their fan bases. Because of this, one of the greatest challenges for rights holders is to continue maximizing the longevity of content without saturating its value through too much repetition.

Of course, IP holders can also protect against saturation by leveraging prior successes as a launchpad to build and distribute new ideas. Creating legendary stories and characters establishes a sense of credibility that can get consumers excited for upcoming releases. This attention can be lucrative at the time of launch, but far from guarantees positive reception. High expectations can lead to commensurate disappointment (see Disney’s recent animation flops).

Ilkka Paananen, CEO of Supercell, recently addressed this in the company’s annual blog post: “Creating a hit game is really, really hard, and requires a lot of luck too. But what is even harder is repeating this success. From a purely mental perspective, it seems easier to take risks and develop games when you have nothing to lose.

The Challenge: Extending IP Lifespan

With this in mind, how can IP owners keep their content fresh without exposing themselves to substantial new content risk? Lately, the answer has been to change the medium by which the audience and users engage with that content. This has been particularly prominent between television / movies (passive consumption) and video games (active consumption).

Games → TV / Movies: Two of the most relevant examples of game IP being converted into passive entertainment are Arcane (based on League of Legends) and The Last of Us (originally a game).

• Arcane (150m+ active League of Legends players): As a competitive free-to-play title with a large active audience, Arcane presented an opportunity to expand the lore of League of Legends’ “Champions” and further attach users to the IP. Within about a month of launch, the show achieved 120m global hours watched.
• The Last of Us (37m+ copies sold): Due to the original game’s single player narrative structure, replayability is somewhat limited. Building a TV series enabled a nostalgic reengagement with the story for its players along with reaching a new non-gaming audience. The series’ fourth episode attracted 7.5m viewers upon release earlier this month.

TV / Movies → Games: Some of the most notable recent extensions of passive entertainment have come through Netflix’s rapidly expanding gaming efforts and the wildly popular Harry Potter game, Hogwarts Legacy.

• Netflix (231m subscribers): Known for its popular TV / movie subscription service, Netflix has been pushing aggressively into mobile gaming. The company is integrating some of their most popular first-party IPs (Stranger Things, Too Hot to Handle) while also allowing third-party game experiences (Netflix). Outside of “choose your own adventure” content such as Bandersnatch, this is the company’s first major foray into a more active form of entertainment.
• Harry Potter (600m+ books sold): The bestselling book series of all-time recently launched a well-received game title through Hogwarts Legacy. This comes ~26 years after the first book was published, and continues to extend the IP’s lifespan.

It is interesting to note the parallels in strategy between moving from Games → TV / Movies and TV / Movies → Games. In the examples highlighted above, the primary goal is either enhancing existing audience re-engagement, new fan acquisition, or retention.

People have different preferences for how they consume content, so diversifying mediums is an obvious way to enhance both reach and engagement. However, the current approaches are rather binary: you are either watching a show (passive) or playing a game (active). A compelling trend we have seen in the startup ecosystem is a more hybrid form of interactive entertainment.

There is a lot of room for innovation in this space, but a few interesting categories have stood out to us so fa

• Interactive Live Entertainment (i.e., Muxy - a Konvoy portfolio company): This category is described as part game and part interactive television show. These are large-scale spectator events where the viewers are able to collectively impact the narrative and determine outcomes. This mass-multiplayer format enables real-time social interaction between audience members while experiencing the same narrative.
• Interactive Narrative Games (i.e., ElectricNoir): Rather than directing a multiplayer event, interactive narrative games enable users to be the main characters in a story. The user’s in-app choices are driving forward a narrative with multiple potential endings. In the case of ElectricNoir, an original series such as Dead Man’s Phone allows the user to solve a murder through interacting with automated characters through text messages. The same mechanics can be applied to a number of other genres and existing IPs.
• Immersive VR Simulations (i.e., Maze Theory): By leveraging VR to place the audience inside of scenes, anyone can dynamically explore environments and scenes, and interact with characters. Rather than simply watching characters make decisions or clicking through decision prompts, the user is guiding the narrative and physically navigating the world. For reference, Maze Theory is currently working on a Peaky Blinders game where the users can explore London, fight enemies, and navigate complex social dynamics.

The consistent thread between all three of these categories is making users feel like they have autonomy within the IP. By fusing elements of active and passive content consumption (rather than choosing between the two), these approaches to interactive entertainment are broadly appealing, dynamic, and replayable. We expect this to continue to become a more popular approach to building and sustaining valuable IP.

Takeaway: In an increasingly crowded media landscape, extending the lifetime value of proven IPs is more important than ever. One of the most effective ways to maintain engagement without risking saturation is changing the ways in which consumers interact with that piece of content. Specifically, we have noticed that the intersection between TV / movies and video games has become increasingly popular. This is due to the unique benefits of both passive and active consumption. However, moving forward, we believe that a hybrid form of interactive entertainment that gives users a unique sense of autonomy and immersion will be particularly engaging and the next iteration in this category.

‍