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It’s been a rough month for the launch of Overwatch 2. In the first few days after release, Blizzard’s long-awaited sequel to 2016’s team-based shooter was plagued with connectivity issues that prevented millions of players from participating in matches. While many of the issues related to server issues have now been addressed, Blizzard now has another challenge: generating enough sales from microtransactions to support the franchise’s transition to a free-to-play model.

So far that has been quite difficult. Overwatch 2’s recent Halloween event, Halloween Terror, introduced a variety of themed character and weapon skins into the game for the “discounted” price of 2,000 Overwatch Coins each, roughly the equivalent of $20. A legendary skin for the character Kiriko was available for 2600 Overwatch Coins, a discount from the original price of 3700 Overwatch Coins. As you might imagine, this is already causing a stir among some players, especially since this year’s Halloween update removed the option to earn unlockable skins just by progressing through the game.

Apparently some players aren’t willing to spend more than $20 for an alternate outfit for their character. However, we know that players are happy to spend around the same price in other free-to-play games like Fortnite to unlock characters from popular franchises, whether that’s Goku from Dragon Ball Z or Marvel’s Spider-Man. This is something that Jon Spector, Overwatch’s commercial lead and vice president at Blizzard, seems to be well aware of, according to a recent interview with GameInformer.

In the interview, Spector announced that while he’s not a Fortnite player, he thinks it’s “super cool” and “awesome” to see brand collaborations like Naruto appear in Fortnite.
“When we look at the Overwatch 2 space, those are things we want to explore,” he says.

So, with current Overwatch 2 monetization strategies leaving a lot to be desired, could we see a shift to brand collaborations as a core monetization strategy instead of the traditional Legendary and Epic skins? Lowering the price of skins and embracing Fortnite-style collaborations would make a lot of commercial sense for Overwatch 2, especially since the company still seems torn about its pricing, according to a recent survey sent out to select players.

We know that Fortnite’s partnerships with the likes of Marvel, NFL, Nike, and Ferrari have been hugely successful for Epic, largely due to the amount of revenue they generate from the sale of cosmetic items such as skins, emotes, banners, and emoticons. For example, the game’s partnership with NFL resulted in 3.3 million NFL-themed skins being sold for $15 each in November and December 2018, according to leaked court documents from the Apple v Epic case. That’s almost $50 million in revenue.

The big question now is how easily Overwatch 2 can replicate Fortnite’s primary business model and how appropriate are these collaborations for the Overwatch brand.

One of the biggest challenges Overwatch 2 faces is the fact that it’s a hero-based shooter, with each hero boasting their own unique set of skills, traits, and playstyles. As is often the case with team-based shooters, players often find themselves favoring specific heroes, whether that be offensive heroes or defensive heroes that suit their preferred playstyle.

This means that Overwatch 2 will have to think hard about how it rolls out brand collaborations. For example, will a Marvel collaboration introduce specially themed skins for each individual hero in the game, or will it introduce a new temporary character into the game? The introduction of a new character must be carefully calculated so that it does not negatively affect the balance of existing characters.

It’s more likely that Overwatch 2 will introduce themed skins rather than new characters like those in Dragon Ball Z. Depending on the popularity of the IP address Overwatch 2 is aiming for, I suspect players will be more inclined to spend $15 or Investing $20 in a skin that turns their favorite Overwatch hero into an alternate version of their favorite anime, movie, TV or comic book characters, whether that be Spider-Man, Darth Vader or one of The Transformers.

Overwatch 2’s hero-based mechanics may also mean that skins are only available for specific characters. While this may initially cause backlash from some fans, it can also provide alternative revenue streams. For example, the style and appearance of the tank hero Reinhardt lends itself well to a Transformers skin. Players who don’t typically choose Reinhardt but are huge Transformers fans may be tempted to buy him a Transformers skin and start using him more. This, in turn, could lead to a domino effect for players going to buy Reinhardt’s broader cosmetic items.

There’s no denying that Overwatch 2 is a great game; the reviews were overwhelmingly positive. If Overwatch 2 continues to struggle with monetization models, brand collaborations like the one in Fortnite could be the answer to its future success. But transitioning an established franchise that previously carried a full-price retail label to a free-to-play model is no easy task.

Important considerations when choosing your target IP

If you’re a game developer looking to emulate Fortnite’s IP success, there are a few things to keep in mind before bringing IP into your game.

  • Don’t pick a target IP just because it’s a very popular brand or character. Look at your game and your players and ask yourself if it’s something that will resonate with them. For example, a clever collaboration between The Walking Dead and State of Survival brought 20 million new players to the game. So understanding your player demographics is a must. Be prepared to prove this to the licensees as well as they will be just as interested to know if there is any overlap in the audience.
  • It may sound simple, but make sure you do your homework. Different IP rights holders may have very different priorities and strict usage requirements. Larger properties, especially those popular with children, can be particularly strict as it is in the owner’s best interest to carefully restrict their use. It is therefore up to the developers to demonstrate that they can comply. Being prepared can give you a huge advantage and help you get through some of the initial screening stages and get in front of the right decision makers.
  • There are more ways than ever to integrate IP into your game. So think carefully about your main goals, as simpler in-game items such as cosmetics and skins are often much easier to negotiate with rights holders due to less complicated terms, plus lighter development and creative costs mean they can be rolled out much faster. FIFA 23 recently brought Ted Lasso from Apple TV and Marvel cards to Ultimate Team, with these simple, smart deals opening the door for more collaborations in the future.

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