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Publishers choose between an original intellectual property (IP) and an established franchise by trading predictable demand against ownership and long-term upside. A known series can make an audience easier to reach and sales easier to forecast, while a new property gives its owner more control and the chance to build an entirely new franchise. Neither route guarantees a hit.
Remedy Entertainment describes the central calculation this way: “Larger and more established audiences lead to higher expected sales and more predictable demand, which lowers the risk carried by each new launch.” That is Remedy’s strategic view, not a universal law. The outcome also depends on who finances development, who owns the IP, who publishes and markets the game, and how revenue is divided.
Why do publishers keep making sequels instead of new games?
A sequel starts with information that an original game does not have: people already know the name, setting, characters or gameplay format. That familiarity can lower the cost and uncertainty of attracting an initial audience. It can also make internal planning easier because historical sales, engagement and community data provide a reference point.
Established franchises create several business advantages:
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- More predictable demand: an existing audience gives a publisher a reasoned sales range rather than a forecast based almost entirely on concept testing and comparable products.
- Reusable creative assets: a world, characters, lore, user interface conventions and production pipelines can be extended instead of invented from zero.
- Sequels and add-on content: a successful release can support expansions, downloadable content and later installments that reuse knowledge and technology.
- Back-catalogue sales: older entries can continue selling when a new game, film, event or announcement renews attention.
- Marketing efficiency: advertising can explain what is new in the next entry instead of first explaining why the property deserves attention.
These are mechanisms for reducing uncertainty or extending revenue, not guarantees. A sequel can miss its audience, ship with quality problems, or be released into a crowded period. A familiar name may raise expectations that a particular installment cannot meet. The evidence does not establish that every sequel is safer or more profitable than every original game.
Familiarity changes the launch problem
For a new IP, a publisher must simultaneously communicate the game’s genre, identity, characters, tone and reason to play. A sequel usually spends less of its launch message on those basics. That does not eliminate marketing work; it changes the work from establishing recognition to convincing existing and new players that this installment is worth their time and money.
Franchises can compound value over time
When several releases share a world or technology base, each project can contribute to a larger asset. A studio may improve tools, production methods and community knowledge while a publisher keeps selling prior entries. The resulting portfolio can be more resilient than a sequence of unrelated one-off products, although the savings and cross-selling potential depend on how much is genuinely reusable.
Are original games riskier than established franchises?
Usually, an original game carries more uncertainty at the audience-discovery stage. There is no established fan base to provide an initial demand signal, and the publisher has less historical data for forecasting. Newzoo’s Global Games Market Report 2024 observed that the first half of 2024 had very few AAA releases and that most were existing franchises, ports or remasters. It counted only four new AAA IPs entering the market in that period: “Four new AAA IPs entered the market in the first half of 2024 — Newzoo, 2024.” That is a dated, half-year observation, not a count for all games, publishers or later periods. Read the report.
Newzoo also described the risk of limited player engagement when a new property competes with established franchises. At the same time, its analysis noted that a new IP can achieve major success when players are tired of repeated franchise releases. The strategic trade-off is therefore uncertainty versus differentiation, not safe versus unsafe in absolute terms.
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What makes an original IP financially uncertain?
- Unproven acquisition: the publisher must find and persuade an audience without a guaranteed base of returning players.
- Unclear positioning: marketing must establish what the game is and why it is distinctive.
- Limited forecasting history: comparable titles can inform a model, but they cannot provide the property’s own sales pattern.
- Higher discovery costs: awareness may require more campaigns, demonstrations, creator outreach or launch incentives before the market understands the product.
- Longer franchise payback: the first game may need to establish the world before sequels and add-ons become possible.
Why a franchise is not automatically low risk
Audience recognition does not guarantee that players will buy a particular installment. A franchise can suffer from weak execution, an unpopular design change, unfavorable timing or competition from other releases. A publisher can also overestimate how many players will purchase a new entry rather than wait for a discount or continue playing an older one. Because no source establishes a universal sequel advantage, forecasts should treat franchise status as one risk factor, not a promise of returns.
Why invest in new IP if franchises are safer?
Original IP gives a publisher something a licensed or inherited franchise may not: ownership of a new asset whose future direction is not constrained by another rights holder. If the game succeeds, the owner can decide whether to make sequels, license adaptations, change genres or stop. The publisher also avoids paying an external owner for the right to use the brand, subject to the actual financing and distribution agreement.
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Ownership creates long-term optionality
An original property can become a franchise with its own sequel, add-on and catalogue opportunities. It can also support merchandising, adaptations or partnerships if the rights owner chooses to pursue them. Those options have value even though their eventual revenue is uncertain. Building ownership into a portfolio can reduce dependence on a small number of licensed brands and give management more control over release timing and creative direction.
Distinctive games can reach players who are tired of repetition
Newzoo’s 2024 market discussion specifically allowed for this possibility: a market dominated by familiar franchises can create an opening for a new concept that feels different. Originality is therefore not only a cost. It can be a way to stand out when many competitors are making similar sequel decisions.
Creative control can protect a strategy
When the developer or publisher owns the IP, it can make decisions about characters, setting, business model and future installments without obtaining permission for every material change. Control does not remove commercial constraints, but it can align creative decisions with the owner’s long-term plan. Remedy identifies “creating and growing franchises” and self-publishing games it owns among its four strategy pillars; that is Remedy’s plan, not a recommendation that every company adopt the same structure. See Remedy’s strategy statement.
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Who owns a game’s IP when a publisher funds development?
Funding alone does not answer the ownership question. A contract can assign IP ownership, publishing rights, development responsibilities, marketing authority, milestone payments and royalties in different combinations. The party paying for development may own the IP, share it, or receive publishing rights without owning the underlying property.
Before evaluating a deal, separate these questions:
- Who owns the IP? This determines who controls the world, characters, sequel rights and licensing decisions.
- Who funds development? Funding determines which party carries cash exposure before sales revenue arrives.
- Who develops the game? The developer may be an internal studio, an external contractor or a co-development team.
- Who publishes, distributes and markets it? These functions involve platform relationships, localization, quality assurance, launch planning and promotional spending.
- Who receives revenue and when? Contracts can provide fixed fees, milestone payments, royalties, recoupment priority or a combination.
Rights and revenue splits follow the negotiated agreement. A public company’s description of its own arrangements is an example of possible structures, not a standard template for every publisher or developer.
Four publishing models illustrated by Remedy
Remedy’s investor materials describe four models that show how ownership, financing and risk can be separated. The labels below summarize Remedy’s description of its business. Read the business-model disclosure.
| Model | IP ownership and funding | Publishing and development | Risk and upside described by Remedy |
|---|---|---|---|
| Self-publishing | Remedy owns the IP and funds the project. | Remedy handles publishing and the associated launch work. | It receives sales revenue after sales-related taxes and discounts. Platform fees, quality assurance and localization are expenses. Remedy carries full financial risk but has the highest revenue potential. |
| Co-published own-franchise game | Remedy owns the franchise; both parties co-fund development. | The parties divide publishing and development responsibilities under agreed terms. | Remedy describes relatively high risk and significant royalty potential, with revenue divided according to the agreement. |
| Own-franchise game with a publishing partner | Remedy retains the IP. The partner typically funds some or all development. | Remedy develops the game; the partner publishes, distributes and markets it. | Remedy describes moderate financial risk and revenue potential because the partner provides funding and handles key commercial functions. |
| Partner-franchise game | The partner funds development and retains the IP. | The partner controls publishing; Remedy develops the game under the engagement. | Remedy receives milestone development fees and may receive royalties after recoupment. It describes lower financial risk but limited participation in success. |
The table shows why “publisher-funded” is not synonymous with “publisher-owned.” In the third model, a partner can fund development while Remedy keeps the IP. In the fourth, the partner funds and owns the property, while Remedy is compensated mainly for development and any contractually defined royalty opportunity.
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How the main trade-offs compare
The following framework helps explain why a publisher may use both original and established properties instead of choosing one exclusively.
| Decision axis | Established franchise | Original IP |
|---|---|---|
| Audience familiarity | Existing recognition can make awareness and initial targeting easier. | The publisher must explain the property and build recognition. |
| Demand predictability | Historical performance and an existing audience can improve forecasting, but cannot guarantee a hit. | Forecasting relies more heavily on market research and comparisons with other games. |
| Ownership and control | Control may be shared with or limited by the franchise owner, depending on the contract. | The creator or financing publisher can retain ownership if the agreement assigns it that way. |
| Development financing | A rights holder, publisher or partner may fund the project; franchise status alone does not specify who pays. | The owner may self-fund, co-fund or use a publishing partner. |
| Marketing | Marketing can build on existing awareness while selling the new installment’s differences. | Marketing must establish the game’s identity as well as its launch message. |
| Sequel and add-on potential | The series structure is already available, subject to audience response and contract rights. | Potential exists only after the first game earns recognition and the owner chooses to continue. |
| Catalogue value | New releases can renew attention for older entries in the same series. | A successful first game can start a catalogue, but there is no existing backlist at launch. |
| Participation in success | A publisher may receive royalties, fees or sales revenue depending on whether it owns or licenses the franchise. | An owner can retain more upside, while a funded partner may accept a smaller share in exchange for lower exposure. |
There is no evidence that one column is always superior. The appropriate choice depends on the company’s capital, capabilities, appetite for volatility and rights negotiated for each project.
What the 2024 AAA release mix indicates—and what it does not
Newzoo’s report provides a snapshot of market behavior rather than a permanent rule. In the first half of 2024, it recorded four new AAA IPs and said most AAA releases were existing franchises, ports or remasters. The observation suggests that large-budget publishers often prefer recognizable properties when launch spending and downside are substantial. It does not show that original games cannot succeed, nor does it measure profitability, development cost or the share of all game releases.
The same report cited Fortnite and annual franchise releases as examples of large engagement and revenue, but the cited passage did not provide a numeric market share for either example. Those names illustrate the scale a durable franchise can reach; they do not establish a universal financial return.
How real portfolios combine original and established properties
Remedy’s owned and partner franchises
Remedy identifies CONTROL and Alan Wake as its own established franchises and Max Payne as a partner franchise originally created by Remedy. Its strategy combines creating and growing owned franchises with work on partner properties. Remedy’s outlook sets goals to double 2024 revenue by 2027 and achieve a 30% EBITDA margin by 2027, maintaining at least that margin through the strategy period. These are forward-looking company targets, not realized results. Read the outlook and guidance.
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This mix gives Remedy opportunities to build assets it owns while earning development revenue from a partner franchise. The partner work can reduce Remedy’s direct financial exposure, while owned projects preserve greater control and potential participation in future franchise value.
Take-Two’s owned-heavy portfolio with selective licensing
Take-Two’s fiscal 2026 proxy says most of its IP is internally owned and developed, while the company selectively licenses recognizable brands, particularly in sports entertainment. For the fiscal year ended March 31, 2026, it reported $6.66 billion in net revenue, $6.72 billion in net bookings and $5.20 billion in recurrent consumer spending, equal to 78.1% of net revenue. Those figures describe Take-Two’s business for that fiscal year; they are not franchise economics for the industry as a whole. Read the fiscal 2026 proxy statement.
The same filing reported nearly 230 million GTA V units sold-in to date and more than 80 million Red Dead Redemption 2 units sold-in as of fiscal year-end. “Sold-in” is the company’s term and should not be silently treated as identical to consumer purchases. These figures demonstrate the scale a successful owned franchise can reach, but they do not predict the performance of every sequel or new IP.
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A disciplined portfolio review can treat original and established projects as different types of bets rather than forcing them into a single ranking.
- Define the strategic asset. For an established franchise, identify which rights are controlled and which require approval. For an original game, specify who will own the IP if the project succeeds.
- Model audience evidence. Use franchise history where it exists, but record uncertainty around changes in genre, platform, pricing or release timing. For an original property, test the concept’s audience and positioning without presenting estimates as guarantees.
- Assign funding exposure. State who pays each development milestone, who funds marketing and what happens if the project is delayed or cancelled.
- Map responsibilities. Put development, quality assurance, localization, distribution, platform relations and marketing obligations in writing.
- Value the upside separately from the downside. A self-funded owned IP can retain more future revenue but expose the owner to the full loss. A partner-funded project can reduce cash risk while limiting participation in success.
- Plan the post-launch path. Decide whether the project is intended to support expansions, sequels, catalogue sales or a one-off release. Do not count those options as revenue until there is evidence that players and the contract support them.
- Balance the slate. A portfolio can combine recognizable franchises, partner-funded work and original experiments so that every project does not depend on the same audience or launch window.
Questions to ask when reading a publisher’s strategy
- Does the company own the IP, or only have a license to publish or develop it?
- Is a reported sales figure sold-in units, consumer sell-through, bookings or revenue?
- Are management targets forecasts or historical results?
- Who funds production and marketing, and who bears overruns?
- Does the developer receive milestone fees, royalties after recoupment, a share of sales or all three?
- Can the company make sequels and add-ons without renegotiating rights?
- Is the cited market evidence global, regional, platform-specific or limited to a particular period?
These questions prevent a familiar brand name from being mistaken for guaranteed demand and prevent an original game from being dismissed solely because it lacks a pre-existing audience.
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