New IP Surge Fuels Risk Assessment by Bandai Namco

Bandai Namco Flags Increased Risks for New IPs Amidst Crowded Release Calendar

Bandai Namco Europe's CEO, Arnaud Muller, recently highlighted the growing challenges publishers face in navigating the increasingly competitive video game market. His comments, shared with GameIndustry.biz, underscore the heightened risks associated with launching new intellectual properties (IPs).

Muller acknowledges Bandai Namco's strong 2024 performance, driven by successes like Elden Ring's expansion and DRAGON BALL: Sparking! ZERO. However, he emphasizes the long-term uncertainties. While 2024 is seen as a year of stabilization following industry-wide adjustments, the long-term outlook presents significant hurdles.

The company employs a "balanced risk approach" to its game pipeline, considering investment levels, existing IP potential, and market segment analysis. However, Muller points out that the concept of "safe bets" is evolving, with new IP launches becoming increasingly complex. Rising development costs and extended timelines necessitate careful budgeting to mitigate potential overruns and delays.

The unpredictability of release dates further complicates matters. With anticipated 2025 releases like Monster Hunter Wilds and Avowed, Muller questions the reliability of projected launch windows, emphasizing the industry-wide challenge of meeting deadlines.

Muller suggests that focusing on established IPs, such as the upcoming Little Nightmares 3, offers a degree of protection. He highlights the importance of a loyal fanbase and the potential for continued success with well-known franchises. However, he cautions that even established IPs aren't guaranteed success, as player preferences evolve. New IPs, with their inherent high development costs and market saturation, are particularly vulnerable to commercial failure.

Muller identifies three key factors for future market growth: a positive macroeconomic environment, a robust platform and install base, and the expansion into new, high-growth markets like Brazil, South America, and India.

Regarding the upcoming Nintendo Switch 2, Muller states Bandai Namco's platform-agnostic approach, emphasizing their readiness to invest in the new console. Despite the challenges, Muller remains optimistic about the future, believing that a successful 2025 release pipeline will drive market growth.