Bandai Namco's Caution: Crowded Release Threatens Novel IPs

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 CEORising Costs and Unpredictable Release Schedules Create Uncertainty

2024 has been a transformative year for many video game developers, and Bandai Namco finds itself right in the thick of it. According to the esteemed European CEO of the company, Arnaud Miller, they have been navigating a landscape marked by economic uncertainties and an increasingly crowded release calendar. During a recent interview, Muller shared his thoughts on the risks and opportunities publishers like Bandai Namco face as they plan future game releases.

Despite Bandai Namco’s impressive financial performance this year—largely thanks to the success of Elden Ring’s expansion, Shadow of the Erdtree, and the upcoming DRAGON BALL: Sparking! ZERO—Muller was quick to highlight that the road ahead is anything but smooth. While 2024 has been dubbed as a "year of stabilization" following industry-wide layoffs and market growth after 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 revealed that Bandai Namco prioritizes a "balanced risk approach" when evaluating its game pipeline. This considers factors like investment levels, "our ability to produce some of our games versus the potential of existing IPs," and new IPs in specific market segments. However, Muller acknowledges that the concept of "safe bets" is evolving.

"Are there safe bets today in the market? I believe yes," Muller said. "But… launching a new IP has become more and more difficult." Rising development costs and timelines necessitate factoring in potential overspending and delays from the outset. If these are not factored in, "you’re in for some bad surprises," Muller continued.

Compounding the risk factor is the unpredictable nature of release schedules. While 2025 boasts a lineup including Monster Hunter Wilds, Avowed, Ghost of Yōtei, and even a potential Switch 2 launch, Muller questions the reliability of their release windows: "How many of these games will come on time?... We are no different to everybody else."

For Muller, focusing on specific genres and established IPs, like the upcoming Little Nightmares 3, provides some protection. "We believe that… there is an audience that is keen on our portfolio, that is loyal to some of our IP, and that will be eager in buying our games," said Muller.

While established franchises may hold a degree of security, Muller noted that even these can’t be taken for granted. Players’ tastes evolve, and what worked in the past may not hold up under new market conditions. On the other hand, new IPs are more susceptible to commercial failure, given their high development costs and the crowded 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 continued.

As previously mentioned, Muller dubbed 2024 as a "year of stabilization" for the industry. However, to "get the market back to significant growth," he identified three essential factors: " a favorable "macroeconomic environment," a strong platform and install base, and new markets with significant growth potential like "Brazil and South America, India, and so on."

Moreover, in response to a question on how the forthcoming Switch 2 will benefit Bandai Namco next year, Muller responded by saying, "we’re platform agnostic. Our games are mostly available on all platforms, and Switch has always been a crucial platform to us… Whenever a new console comes out from Nintendo, we’ll be prepared to invest there."

Despite the aforementioned challenges, Muller stays optimistic about the future. He believes that if all the portfolio of games planned for a 2025 release materializes, "then obviously, I don’t see how the market wouldn’t grow next year."