5 Reasons Why Hollywood is Betting Big on Gaming IP as the Next Cash Cow

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The remarkable triumph of the "Super Mario Bros. Movie" highlights the potential of adapting video game intellectual properties for film and television. With the previous decade dominated by superhero movies and comic book adaptations, Hollywood's focus may shift to gaming in the upcoming decade.

"Super Mario," which was produced by Nintendo, Illumination, and Universal Pictures for approximately $100 million, grossed over $200 million during its five-day domestic debut. This is merely the beginning, as streaming platforms like Netflix and Paramount+ are securing the rights to other popular gaming IPs like "Fallout" and "Mass Effect," and HBO's "The Last of Us" series has already taken the entertainment world by storm.

Hollywood's dalliance with video game adaptations is still in its early stages, but there is a potential to become a long-lasting relationship. Digiday interviewed industry experts to understand why gaming IPs have become the new cash cow for the film and TV industry.

Below are five reasons:

How Gaming Became a Multi-Generational Activity and Captivated Hollywood

Popular gaming franchises like "Mario" have been around for decades, making gaming a multi-generational activity. Kids who grew up playing these games are now parents themselves, passing down their love for gaming to their children. While parents may have rolled their eyes at the concept of a video-game-based movie when the live-action "Super Mario Bros." film was released in 1993, last weekend's box office numbers for the new "Super Mario Bros. Movie" prove that parents and children alike showed up in force to watch it. The film was packed with references to Mario games young and old, ensuring there was something for every generation of fans.

According to Jonathan Stringfield, VP of Global Business Research and Marketing at Activision Blizzard Media, the "Super Mario Bros. Movie" had nostalgic appeal, with recognizable references from the game that kept even those outside the target demographic engaged through nostalgia and familiarity with the IP.

Video game adaptations are getting better, and audiences are noticing

As the quality of video games continues to improve, so does the quality of their film and television adaptations. Studios are now investing more resources into game adaptations, resulting in high-quality productions such as "The Last of Us" series, which has received critical acclaim. Audiences are also responding positively, with the "Super Mario Bros. Movie" receiving a 96 percent audience score on Rotten Tomatoes.

According to Margaret Boykin, head of film and television content at Ubisoft Film and Television, creative teams are given more freedom and resources to ensure the adaptation's success. This shift is important because past adaptations have suffered from strict adherence to source material, which can limit the storytelling. In the past, networks and studios have been hesitant to deviate from game canon, but now, audiences are applauding adaptations that add to the game's lore.

The Potential for Cinematic Universes in Gaming IP

The triumph of the Marvel Cinematic Universe has prompted film and television studios to explore other properties that could be transformed into a comprehensive cinematic universe. Gaming IP may be one of them because of its potential for long-term storytelling and the creation of unique characters, such as those found in the world of "Mario." Although only a small percentage of these characters appeared in the "Super Mario Bros. Movie," the vast number of memorable gaming characters suggests that cinematic universes could be created.

This suggests that gaming IP has ample potential for the creation of cinematic universes, including the potential for a Nintendo Cinematic Universe (NCU). According to Jonathan Stringfield, VP of Global Business Research and Marketing at Activision Blizzard Media, "Not a lot of studios have that depth of IP to tap into, whereas video games are a huge body of IP that has been relatively unexploited."

In addition to the abundance of characters and settings in the world of "Mario," Nintendo owns numerous other popular franchises, such as "Metroid" and "The Legend of Zelda," which could potentially be integrated into the NCU.

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Hollywood Responds to Increased Gaming Activity Amid COVID-19

It comes as no surprise that the COVID-19 pandemic has brought about a surge in gaming activity, which has now spilled over to Hollywood. As the pandemic pushed people indoors, gaming content consumption skyrocketed, producing a new generation of gaming fans familiar with gaming franchises such as "Mario" and "The Last of Us." According to the Entertainment Software Association, 227 million Americans played video games in 2021, up from 214 million the previous year. During the same period, the Twitch livestreaming platform witnessed a 67 percent increase in viewership.

Through adaptations such as the “Mario” movie, the film industry is simply responding to this increase in interest.

Pre-Existing Fan Communities Make Gaming IPs a Valuable Asset for Film Studios

Gaming IPs with passionate fan communities are becoming a guaranteed success for Hollywood studios. These IPs already have a built-in fandom, and fans are likely to show up regardless of the movie's quality. With declining sales of comic book IPs, gaming IPs may have more longevity. Hollywood studios are turning to gaming IPs as a reliable cultural property to minimize risks. Recent successful video game adaptations have proved the potential of gaming IPs as movies. However, studios need to understand the importance of appropriate investment in these films for long-term success.

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