The mobile games market is growing at a record-breaking pace. The market reached a new high in 2016, generating more than $40.6 billion in worldwide revenue, up 18% from 2015. To put this in perspective, revenue generated by mobile games is now equal to all global movie box office sales during the same period, and mobile games now account for half of the entire global digital games market, according to a new report, "Can't Stop, Won't Stop: The 2016 Mobile Games Market" from SuperData Research and Unity Technologies. Make no mistake about it: mobile games are big business.

At the same time, competition in the mobile games market is fierce. There are more than 800,000 mobile games in the app stores compared to 17,000 titles available for all games consoles and PCs, all vying to be discovered. While the barrier to entry is still low, the marketing investment required for mobile games publishers is so high that small developers (except for a few notable successes—Crossy Road, Flappy Bird, Monument Valley) have not been able to compete. In fact, approximately 80% of mobile games revenue in the top 1,000 titles is earned by the top 20 publishers in each region, which means that tens of thousands of developers are fighting for the remaining 20% of revenue, according to research, "Mobile games: leading but less lucrative" from Deloitte Global. With so much competition, developers and publishers are increasingly turning to licensed intellectual property (IP) in hopes of gaining an advantage.

Games based on the IP of television shows, movies and books have existed for a long time, but the reality is that many of these games have been low quality, often driven by a desire for a quick financial return rather than creating quality gaming experiences. However, in the last few years, there has been a rise in commercially successful (i.e., top grossing titles in the app stores) mobile games based on licensed IP. Mobile games like Simpsons: Tapped-out, Kim Kardashian: Hollywood, Fallout: Shelter, Walking Dead: Road to Survival and Marvel Contest of Champions have had great commercial success and are breathing new life into the relationship between Hollywood, IP rights holders and the games industry.

This development raises the question: what impact does licensed IP have on the success of mobile games? The theory behind licensed games is that brand matters and, assuming all else is equal (the game is well-designed and captures the spirit and characters or the underlying IP), will provide an advantage when it comes to user acquisition by appealing to both existing and new fans. But not all brands are equal. There is an interesting study done by Finnish mobile game analytics company GameRefinery that attempts to measure the effect of licensed IPs on the commercial potential of mobile games. The study found that a strong licensed IP helped games that had the other characteristics of a successful game to turn them into very successful games. However, the study also pointed out that having a well-known IP alone is not enough to ensure commercial success, which also requires well-designed features, effective implementation and a sufficient user acquisition budget. If a game lacks these core elements, the IP alone can do little to salvage the commercial opportunity.

What does this mean if you are considering launching a mobile game? If you are an existing IP holder or game developer or publisher, there is a lot you need to know before entering the market to license IP for mobile game development. Which game developers and publishers should you be talking to and why? How do you structure the right deal that sets you up for commercial success without compromising the value of your IP? And how do you evaluate developer/publisher partnerships since each has its own culture and genre expertise? If you are a developer, what kind of IP makes the best mobile games? How do you identify IP with value that translates into success in the mobile games market? And perhaps most importantly, how do you educate and convince IP holders of the long-term value in creating quality gaming experiences as opposed to just focusing on the immediate financial return?

With the global market for mobile games expected to continue to grow, there are ample opportunities for both IP owners and game developers/publishers to forge successful long-term partnerships that grow the value of the underlying IP and bring commercial success. If you've been on the sideline, now is the time to get up to speed on this growing business.