Fallout is the Final Nail in the Transmedia Coffin

The Fallout TV series has received widespread critical and audience acclaim, with 65M viewers and Amazon Prime’s 2nd most-watched show of all time. The show appears to have cracked the secret transmedia success formula: top-tier IP, backed by a six-figure budget, distribution through a 200M MAU network, and widespread critical acclaim. Consistent with the transmedia thesis, engagement with Fallout games has skyrocketed, with *all* games experiencing significant uplifts. However, price cuts have ended, and according to VG Insights, revenue is down 50%+ from two-week highs in titles like Fallout 76. While the uplift has yet to return to equilibrium, a generous guess might land $40M in incremental revenue across the franchise before returning to a steady state. The final revenue impact may tally north of $50M. And yet, hailed as a transmedia success, Fallout instead shows the exact opposite: if this is the best transmedia offers, then the concept is creatively bankrupt.

The marginal revenue uplift from Fallout game sales amounts to little in the face of the show’s spend. And yet, transmedia’s biggest win should come from “rising IP tides.” The recent track record isn’t great: the Warcraft movie did little, nor did the Mortal Kombat, Assassin’s Creed, and Gran Turismo movies. The Halo and Witcher TV show’s creative atrocities hurt the franchises rather than help them.

Variety reports that Fallout cost $150M, which suggests a marketing budget north of $100M. $50M in incremental game revenue amounts to ~20% of the TV show’s total spend and likely less, maybe ~15% of its attributed revenue. Yet, the *expected* outcome should exceed 20% for the transmedia thesis to grow.

Transmedia isn’t a TV show based on a game more than Caesar salad is a side dish based on Italian cuisine. Instead, Transmedia’s entries should form a “core loop” – one media entry leads to another rather than mere adjacency. However, the Venn Diagram of viewers who consume differing formats is definitionally smaller than those who consume one media type. Creatives haven’t figured out how to optimize the format, giving consumers a collection of dishes rather than a meal.

As Jen Donahoe aptly suggested, the right word for the game-inspired movie and TV show is “franchise.” Here, the most significant effect is past entries building an audience for the next entry, not the next entries uplifting past entries. Five Night At Freddie’s is a prime example, using the property as a story distribution channel to the tune of a $78m opening. However, the nature of game-based uplift differs from books or music.

Games experience significant capital decay: Fallout 3 jumped +300 concurrent users (CCU), while Fallout 4 jumped +150k CCU. It’s hard to imagine similar declines between Harry Potter book releases upon a new film.

Zero marginal cost revenue is a nice treat, but successful strategies require scale, and transmedia has more to prove here.

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