Bandai Namco Cautions on New IP Risks Amid Crowded Release Calendars

According to Bandai Namco's European CEO, publishers are facing new challenges when it comes to planning releases. Read on to learn more about Arnaud Muller's statements and their implications for new IP releases.

There are Risks in Developing New IPs in a Crowded Market, Said Bandai Namco EU CEO

Rising Costs and Unpredictable Release Schedules Create Uncertainty

2024 has been a transformative year for many video game developers, and Bandai Namco is navigating this challenging landscape. Arnaud Muller, the company's European CEO, highlighted the economic uncertainties and crowded release calendar that are complicating future game release planning. In a recent interview, Muller discussed the risks and opportunities facing publishers like Bandai Namco.

Despite Bandai Namco's strong financial performance this year, driven by the success of Elden Ring's expansion, Shadow of the Erdtree, and the upcoming DRAGON BALL: Sparking! ZERO, Muller emphasized that the path forward is fraught with challenges. Although 2024 has been described as a "year of stabilization" following industry-wide layoffs and market growth post the "COVID years," it's the longer-term challenges of game development and release planning that are causing concern.

In an interview with GameIndustry.biz, Muller explained that Bandai Namco prioritizes a "balanced risk approach" when evaluating its game pipeline. This strategy considers factors such as investment levels, the company's ability to produce games, the potential of existing IPs, and the viability of new IPs within specific market segments. However, Muller acknowledges that the notion of "safe bets" is becoming increasingly complex.

"Are there safe bets today in the market? I believe yes," Muller stated. "But… launching a new IP has become more and more difficult." Rising development costs and extended timelines require careful planning to mitigate potential overspending and delays. "If these are not factored in, you’re in for some bad surprises," Muller warned.

The unpredictability of release schedules adds another layer of risk. With 2025 featuring a lineup that includes Monster Hunter Wilds, Avowed, Ghost of Yōtei, and possibly a Switch 2 launch, Muller questions the reliability of these release windows: "How many of these games will come on time?... We are no different to everybody else."

Focusing on specific genres and established IPs, such as the upcoming Little Nightmares 3, provides some level of security for Bandai Namco. "We believe that… there is an audience that is interested in our portfolio, that is loyal to some of our IP, and that will be interested in buying our games," Muller noted.

While established franchises offer some stability, Muller pointed out that even these cannot be taken for granted. Player preferences evolve, and past successes may not translate to future market conditions. Conversely, new IPs face greater commercial risks due to their high development costs and the saturated gaming market. "Little Nightmares 3… has a fanbase that hopefully will be interested in playing that game, irrespective of whether GTA comes in 2025 or not," Muller added.

Muller described 2024 as a "year of stabilization" for the industry. However, to achieve significant market growth, he identified three critical factors: a favorable "macroeconomic environment," a robust platform and install base, and new markets with growth potential, such as "Brazil and South America, India, and so on."

When asked about the impact of the upcoming Switch 2 on Bandai Namco next year, Muller responded, "we’re platform agnostic. Our games are mostly available on all platforms, and Switch has always been an important platform to us… Whenever a new console comes out from Nintendo, we’ll be ready to invest there."

Despite the challenges, Muller remains optimistic about the future. He believes that if the planned 2025 game portfolio materializes, "then obviously, I don’t see how the market wouldn’t grow next year."