Digital Licensing Is Eating the World: What Gaming Expert Simon Kay Knows That Most Licensors Don't
After two decades in licensing, I've seen the industry transform in countless ways. But no shift has been more dramatic—or more misunderstood—than the explosion of digital licensing. We've gone from a world where "games licensing" meant stamping your logo on a PlayStation cartridge to one where your IP can live in Fortnite, Roblox, mobile games, gambling platforms, VR experiences, and formats that didn't exist six months ago.
Most licensing professionals are scrambling to keep up. But Simon Kay has been ahead of this curve for 30 years.
When Simon started focusing on games and gaming as a core licensing category three decades ago, people thought he was crazy. "What's that all about? Why bother?" they asked. But Simon, who grew up with technology, knew something they didn't: "It was just always going to be the most important thing that underpins merchandising and licensing. Everybody was migrating there."
Today, Simon runs AT New Media, a consultancy specializing exclusively in digital licensing across every platform imaginable—from AAA console games to mobile integrations, from iGaming to the metaverse. And our conversation revealed something crucial: while everyone else is still trying to understand what digital licensing is, Simon's already moved on to where it's going.
Here are five insights from our conversation that will change how you think about digital licensing.
1. Content Integrations Have Replaced Whole Games as the Primary Opportunity—And That Changes Everything
The Insight: The biggest shift in gaming licensing isn't new platforms—it's the move from licensing entire game experiences to licensing individual content pieces that drop into existing games.
Simon was clear about this evolution: "Generationally, everything has changed. You go back 20 plus years ago, everything was game driven. The only way to get your product found or get up in app stores or to get to retail distribution was to basically make a whole game, get it in a box, stick it on a shelf and make sure that works. Whereas now with content integrations versus whole games—building a whole game these days was expensive a long time ago, but it's really, really expensive now."
The economics have fundamentally shifted: "The barriers to entry across most platforms when you bring to consideration the cost of development, plus the cost of marketing, the cost of customer acquisition, they've all gone through the roof. So that means content integrations have become so much more popular."
He explained the practical differences: "Instead of building a contract for a whole game that might be three to five years in length with 12 to 24 months development time, content integrations—you can put contracts together that probably don't have a period of more than maybe 12 months, but sometimes with an active window of maybe three months, sometimes only 30 days."
Simon gave concrete examples: "Marvel Rivals was a very good content integration into the Fortnite ecosystem, performed very well. Star Wars integration with the Stormtroopers and various other things—that's a content integration. SpongeBob in Stumble Guys was very successful. In Roblox, you've had Charlie XCX involved in Dress to Impress, which worked incredibly well."
The speed advantage is massive: "It's much easier to create a piece of content to drop into a game experience. It's a much quicker turnaround process, both contract wise, development wise, approval wise. All of that is so much quicker with the content integration. That's why you're seeing this proliferation of partnerships and collaborations across all games and gaming spaces."
Why It Matters: If you're still thinking about gaming licensing as "we need to make a licensed game," you're thinking like it's 2004. The market has moved to shorter-term, lower-risk, faster-to-market content integrations that can test across multiple platforms simultaneously. The old model required multi-million dollar bets on 3-5 year development cycles. The new model allows you to test your IP in Fortnite for 30 days and see what resonates.
The Takeaway: Stop waiting for the "perfect" game partner to build you a AAA title. Start exploring content integration opportunities across existing successful games. A 30-day Marvel skin drop in Fortnite will reach more people faster and with less risk than a dedicated Marvel game that takes three years to develop. The future of gaming licensing is being nimble, testing fast, and scaling what works—not betting everything on one massive title.
2. Customer Acquisition Costs Have Made IP More Valuable Than Ever—For the Right Reasons
The Insight: As traditional marketing costs have skyrocketed, IP with built-in audiences has become a more cost-effective customer acquisition tool than paid advertising.
Simon explained the shift: "One of the biggest things—the ability for developers, no matter what game they have, to use social media or traditional old school ways of marketing to acquire customers has actually got more difficult. So using IP that has an existing audience and then they can use that, if possible get support from the IP (very rare, but does happen from time to time), the revenue model is good enough for them."
The strategic value is clear: "That's a very good way to build your customer base by using IP to bring them to your game. That's another reason why IP's got more popular over recent times with content integrations—customer acquisition costs have gone through the roof. So getting an IP and doing it right and doing it well can actually now work more cost effectively for a lot of developers than spending huge amounts of money on traditional marketing."
He gave a specific example: "Stumble Guys' SpongeBob integration—I think demographically it's skewing slightly younger, but their SpongeBob integration was very successful. It's a wonderful experience and really enjoyable. IPs in games like that are used increasingly for customer acquisition."
Simon emphasized this isn't just about awareness: "It's not just about bringing people to the game—it's about finding the right IP that resonates with your existing audience and brings in similar audiences. If you've got a game with a particular demographic, you want an IP that over-indexes with that same demographic so you're expanding your reach, not just adding random players."
Why It Matters: This fundamentally changes the value equation for both sides. Developers aren't just licensing IP to make products more appealing—they're licensing IP because it's cheaper than Facebook ads and brings pre-qualified audiences. Licensors aren't just earning royalties—they're providing genuine marketing value that justifies better terms and longer partnerships.
The Takeaway: If you're a licensor, start positioning your IP based on audience data, not just brand awareness. Show prospective gaming partners exactly what demographics your IP reaches, where they spend time, what they engage with. If you're a developer, stop thinking of licensing fees as pure cost—think of them as marketing spend that brings targeted audiences. Calculate your customer acquisition cost for paid marketing, then compare it to what licensing an IP would cost per acquired customer. You might be surprised which is cheaper.
3. Platform-Specific IP Performance Varies Wildly—And Understanding Why Is Critical
The Insight: An IP that works brilliantly on mobile might flop on console, and one that dominates in iGaming might fail in Roblox—understanding platform-specific dynamics is essential.
Simon shared his approach: "I tend to help clients understand and see the popularity of particular game styles within a platform. In iGaming, you have certain themes that work very well, whether that's Egyptian, whether that's Irish, whether that's pirates. There is the demographical element that intertwines with that, but you can see which games monetize well from a thematic perspective."
He used The Goonies as an example: "The Goonies has been incredibly popular in iGaming space. That's pirates, it's adventure, but there's also the demographical element—the iGaming audience skews 40-60 year old males primarily, and The Goonies is a nostalgic property for that demographic."
The warning is crucial: "You can't just stick an IP on something and expect it to work. It doesn't matter what platform it is. Every game, you can't just stick an IP on something and expect it to work. There's been many, many examples of very poor performing IP based games over the years and more often than not that's not been driven by the quality of the IP, it's been driven by the lack of quality of the game experience itself."
Simon also highlighted platform-specific opportunities: "The Moomins in China—very big popular IP in China, one of the top 10, top 15 IPs in that part of the world, had a fantastic content integration with Sky Children of Light, which is a brilliant game in China. They found a partner in a particular territory where they have significant resonance and they found the right kind of partnership in that market."
He emphasized the importance of local thinking: "It should be looked at no differently than if you have the best apparel licensee in Japan for the Japanese market. There are great developers with great games that are local to particular territories. If you have an IP, never underestimate doing the work to understand where my biggest opportunities might be."
Why It Matters: The licensing industry loves to talk about "global rollouts" and "worldwide rights," but in gaming, what works in one market or on one platform may completely fail in another. A property that's huge in Western console gaming might be unknown on Chinese mobile platforms. An IP that resonates with Roblox's young female audience might bomb with Steam's middle-aged male demographic.
The Takeaway: Before licensing your IP into gaming, do the research: Where does your IP have awareness? What age demographics engage with it? What platforms do those demographics use? What game genres do they play? Then match opportunities accordingly. Don't just say yes to whoever comes knocking—say yes to partners whose platform and audience genuinely align with your IP's strengths.
4. Roblox's New Creator Portal Is a Game-Changer—But It Requires a Strategic Approach
The Insight: Roblox's creator content portal is democratizing access to major IP, but success requires understanding both the opportunities and the risks.
Simon explained what Roblox has built: "The platform owner puts technology and pathways in place for you to actually manage your IP. Roblox is building a bridge between IP and creators, which we can loosely call a creator content portal. You'll be able to basically list your IP or elements of your IP that are available for the talented content creators to get access to."
The strategic value: "It will enable IP to get closer to the most talented people that in turn have routes to the best games within that marketplace. Roblox are basically putting together an approved portfolio of IPs and making those available to content creators to create content for the Roblox platform."
But Simon identified concerns: "I do see risk. I don't think you're going to get warranties from the developer directly in the traditional sense of the word. If the same traditional steps are taken—asset approval, approval process within certain timelines, release windows, control of the narrative in terms of PR and marketing—if the traditional steps are taken, I don't see why it's an issue."
The UGC challenge: "The difficulty with a lot of the new platforms and the requirement for UGC to enable the audience to be able to be creative—it's not just all about what you're given, it's about what you can do with it. I have seen a few examples that are concerning with regards to where that IP goes and how it is used, because Roblox is technically a free environment."
Simon's verdict: "I don't see how it can't be a success because of the success of the platform. Roblox as a platform has very sticky games. It will be interesting to see how those co-labs are managed in terms of volume and exclusivity and windows of time. If managed well, I think there's no issues and I think it's a brilliant opportunity."
Why It Matters: Roblox represents a massive audience—particularly younger demographics that are increasingly hard to reach through traditional channels. But it also represents a loss of control that makes many IP owners nervous. The new creator portal attempts to thread this needle by providing structure and oversight while maintaining the creative freedom that makes Roblox special.
The Takeaway: If you're an IP owner, don't dismiss Roblox because you're nervous about UGC and control. Instead, engage with their creator portal strategically: Start with limited elements of your IP, not your whole brand. Set clear guidelines for what's approved and what isn't. Monitor what creators do with your assets. Build relationships with top creators directly. Treat it as a learning opportunity where you can test what resonates with Gen Z and Gen Alpha audiences. The insights alone may be worth more than the revenue.
5. The Next Decade of Gaming Will Be Driven by UGC, Web3, and AI—And It's Going to Move Faster Than Anything We've Seen
The Insight: The pace of change in digital licensing is accelerating exponentially, and the tools that will define the next era are already here—most people just don't recognize them yet.
When I asked Simon what excites him about the future, his answer was revealing: "I'm personally excited about the growth of UGC and Web3 and where that takes everything. NFTs are a very difficult word because of what they are, but from a games and gaming perspective, experiences that move from Web2 into Web3 and integrate very well, not just from a monetization perspective and using different cryptocurrencies which are going to grow."
He explained the opportunity: "Understanding what cryptos might work in the games and gaming space for particular transactional reasons is quite interesting. UGC isn't going to disappear. From a strategic perspective for any IP owner, have a plan. How do I view user generated content? Do I want to set up some restrictions or parameters that I'm happy for my IP to be used, evolved?"
The reverse merchandising potential excited him: "Who owns that IP from a user generated content perspective? What happens if some creator makes something amazing in a game that's so hot and popular? How can I get access to it to merchandise it out of the game? Maybe someone creates an amazing bag or hat or jewelry or watch and you think, wow, this is so popular, they're all buying it, they'll buy it in the real world too. You've got this very exciting reverse inverse process from creativity that actually drives merchandising opportunity."
His timeline warning: "With AI and UGC and all these different acronyms that are being thrown around, in terms of how it's going to look, there won't be the same agency, lawyer structure that exists today. It's going to be a very fast moving space. If we were to be looking back from 30 years ahead we will really look like dinosaurs. In 30 years time it'll be a completely different world, happening so fast, so quick."
Simon's advice was urgent: "The biggest piece of advice I could give anybody is don't wait for it anymore. You've got no time. If you're not proactive now with this space, you'll just miss it all. This is like weekly now that there's potentially a new opportunity across all the different angles. The driver of revenue generation will be the community not the business itself."
Why It Matters: Most licensing professionals are still trying to understand how content integrations work in Fortnite. Meanwhile, the platforms and business models that will dominate in 5-10 years are already being built. Web3 ownership, UGC-driven creativity, AI-generated content, and community-driven economies aren't theoretical—they're happening now, and the companies that figure them out first will own the next era of digital licensing.
The Takeaway: Stop thinking you have time to "wait and see" on emerging technologies. Start small experiments now: Put some IP elements into Roblox's creator portal and see what happens. Explore what Web3 ownership might mean for your digital collectibles. Consider how AI might enable personalized content at scale. Join communities where these conversations are happening. You don't need to bet the company on any of these, but you need to be learning and testing now—because by the time these platforms are "proven," it'll be too late to learn from mistakes.
The Bottom Line
Simon Kay's 30 years in digital licensing have taught him one fundamental truth: the only constant is acceleration. What took a decade to happen in his early career now happens in a year. What took a year now happens in months. And the pace is still increasing.
His message to the licensing industry is both exciting and urgent: digital licensing isn't a category anymore—it's the future of licensing itself. Every brand will eventually need to figure out how to show up authentically in games and gaming spaces, because that's where audiences are spending their time and building their identities.
As Simon put it when I asked about 30 years from now: "The driver of revenue generation will be the community not the business itself."
That's the future of licensing—participatory, community-driven, constantly evolving, and moving at a pace that will leave behind anyone who isn't willing to experiment, learn, and adapt.
The question isn't whether your brand belongs in digital licensing. The question is whether you're moving fast enough to capitalize on the opportunity before it passes you by.
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