Why a licensed slot is more expensive to produce

The "by film/TV series/comic book" slot feels familiar in content - but it's more expensive to produce and market than usual. The reason is a combination of legal, creative and transaction costs that the original IP does not (or they are minimal). Below is a map of these costs, benchmarks by numbers and practical ways to save without losing quality.

1) License economics: fix + variable

Two key components:

MG (Minimum Guarantee) - a guaranteed minimum for the copyright holder, paid in advance or in installments.
Royalty - percentage of Net Revenue/NetWin/turnover (depends on contract).

Bottom line: even before the first spin, you carry a fixed expense (MG), and after the release - a constant "premium" to the cost price in the form of royalties. This immediately increases the break-even point.

2) Approval loop: expensive delays

The licensee is obliged to coordinate concepts, art, texts, animations, sound, advertising creations and even micro-copyright. Each reconciliation cycle (typically 10-20 business days) may:

shift sprints and increase man-hours (alterations);
Break certification/release windows and increase marketing costs (restarts)
pull with you additional filming/redrawing for edits.

For the original IP, you are the "customer"; the license also has a copyright holder.

3) Legal block and rights clearing (clearance)

Characters/likeness (appearance of actors), logos/fonts/slogans, frames/artboards, music (rights to the composition and to the soundtrack are different licenses).

Territories and terms (there is a step model: "first EMEA, then NA").

Exclusivity (genre/platform/geographic) - raises the stake.

E&OO (Errors & Omissions) insurance - a separate budget line.

Each sub-clause is a lawyer and time. The original lacks many of these points.

4) Manufacturing assets: "expensive beauty"

The license slot rarely forgives conventions - the audience learns the details. Hence:

Highly detailed art (concept → 2D → 3D/retouching): more watches and LQA.
Actors/voice-over (if allowed): casting, contracts, studios.
Musical themes/jingles: licensing/orchestration/stem mixes.
Cinematics/trailers for release are often a contract commitment.

In the original IP, you can "simplify the language" of the visual for the budget - there is less freedom in the license.

5) Content restrictions: design through "corridors"

"permissible" poses/scenes, camera angles, color palettes;
prohibitions on violence/alcohol/ambiguity;
a ban on mechanics that "break the canon."

You are re-iterating mechanics to comply with the canon - this is time and QA.

6) Localization and LQA are growing in price

Licenses require canon terminology and approval of localized texts. That is:

more rounds of LQA (language QA) and retests;
strict glossaries and less copyright freedom;
sometimes - duplicates of videos in several languages.

7) Compliance/certification: more profile builds

Market builds: 'game_id × country × rtp_profile × build_hash' - at licenses is more than options (icon/a prevention / age ratings).

IP help/disclaimers on the game card, sometimes separate screens.

Recertification when editing visual/text (in terms of markets) - additional fees and time.

The wider the geography, the more expensive the "ladder" of the Serts.

8) Marketing commitments

The contract may provide for:

Co-marketing budget (mandatory minimum media);
Promo formats (press kits, trailers, offline activations, merch);
Release dates and windows tied to season/film premieres.

This is not only money, but also an operating load.

9) Management costs

Project management (separate producer/RM for approvals and lawyers);

Risks and buffers (30-45 days of stock for approvals/overhauled);

Internal analytics/reporting to the copyright holder (regulatory reports, volumes/geo/income).

The original IP needs all this to a lesser extent.

10) Budget formula and cost structure benchmarks

Simplified model:

[
\textbf{Total Cost} = \text{MG} + \text{Prod} + \text{Legal} + \text{LQA/Cert} + \text{Mkt Obl} + \text{E&O} + \text{PM/Overhead}
]

Ubi:

'Prod '- art/client/backend/sound/video;
'Legal '- lawyers, clearance, actors/music contracts;
'LQA/Cert '- localization, language tests, serts/rearranged;
'Mkt Obl '- co-marketing, trailers, banner whales;
'E&O '- insurance of errors and omissions;
'PM/Overhead '- management, buffers, IP reports.

Estimated proportion of articles (editorial medians):

MG: 20–35%
Production (art/code/sound/trailer): 30-40%
Legal/clearance/E & O: 5-10%
Localization/LQA/Certification: 8-12%
Marketing commitment (minimum): 10-20%
PM/overhead: 5-8%

For the original IP MG = 0, royalties = 0 - this creates the main gap.

11) Why payback still converges

Licenses give:

Instant brand elevator (recognition of → above CTR cards);
PR and news feed (press, streams, collaborations);
IP fan segment with increased conversion and ARPPU;
Easy cross-promo (collections on the topic/heroes, seasonal events).

If LTV-uplift overlaps royalties + MG, the project pays off and gives a "long tail."

12) Top 10 hidden costs often forgotten

1. Additional rounds of copyright edits under the canon.

2. Stock photos/videos: not all are included in the IP package.

3. Music systems (divided tracks) for mixes.

4. Photo shoots/renders at the angles allowed by the guide.

5. Increased customer weight (rich assets) → CDN/storage/optimization.

6. Accessibility/contrast according to the requirements of the copyright holder.

7. Jurisdictional variations of warnings/age icons.

8. Art duplication for promo grids and App screens.

9. IP KPI reporting every N weeks.

10. Payment commissions on co-branded activities (events/draws).

13) How to reduce cost (without loss of quality)

Choose "motives," not frames. Take the setting/atmosphere, not the expensive likeness/sound.

License the song, not the master. Re-record the track with the composer.

Pre-approved packages. Agree in advance color palettes, fonts, "corners" of characters.

Shooting/renders "one day." Make a shot list for the whole year promo.

Wave certification. First priority markets, then expansion.

Single promo-SDK. Tournaments/missions/freespins in one framework - less one-time development.

Plan B for music/art. "Inspired by" versions in case of failure of approvals.

14) Production and contract checklists

Contract/Legal

Territories/term/exclusivity, media rights (digit/stream/offline).
MG, royalty rate, reporting periods, audit.
Approval SLA, number of rounds, escalation, "silence = agreed."
Set of materials (logo, icons, fonts, references, music systems).
E&O, liability, force majeure, sunset plan.

Production/output

Copyright guide and glossaries for all locales.
Pre-approved key art/color/fonts/poses/angles.
Localization plan and LQA, timing of serts by market.
Promo kit: trailer 15-30 s, banner sets, HQ screenshots.
Matrix market builds ('rtp _ profile', 'build _ hash', warnings).

15) 30-60-90: realistic plan

0-30 days - Term sheet (territories/term/royalties/MG), guide for approvals, pre-approved palettes/fonts/corners, shot list.

31-60 days - Vertical Slice and key screens; start of LQA/locales; music (composition vs master); package for serts of priority markets.

61-90 days - Iterations by edits, promo kit (trailer/banners), co-marketing plan; supply of "waves 2-3 "to the serts; preparation of a sunset plan.

16) FAQ short

Is it possible without MG? Rarely. Sometimes they reduce MG in exchange for a higher royalty rate or a minimum for media.

Do we need likeness actors? Only if using faces/voices. Otherwise, work with IP "motives."

What if approvals slow down? Hard SLA in the contract + "pre-approved package" of assets, which can be published without additional approvals.

Should I take niche IP? Yes, if the audience matches: less coverage - higher conversion in the cluster, MG is usually lower.

The license slot is more expensive due to fixed payments (MG), constant royalties, a complex approval cycle, legal and increased requirements for assets, locals and certificates. But strong IP often gives a sprint of recognition and conversion that pays for the difference. Success is in the discipline: pre-agreed guides, step-by-step serts, a unified promo stack and a flexible design "based on" rather than "on frames." Then the license ceases to be an "expensive suit" and becomes an accelerator of the economy of your content.