Building franchises and activating fandom

# Building franchises and activating fandom

Pokémon started in 1996 as a Game Boy cartridge with 151 creatures in it. It is now generally ranked the highest-grossing media franchise ever, somewhere north of $90 billion in lifetime retail value, and the video games are a minority of that total. The bulk is trading cards, plush, apparel, a mobile app built by another studio, and licensing contracts signed by The Pokémon Company, an entity jointly owned by Nintendo, Game Freak and Creatures whose main job is deciding who may use Pikachu, where, and on what terms.

One property, three decades of recurring audience. This lesson takes apart the machinery that does that: doors between formats, owned communities, superfan tiers and licensing, with The Pokémon Company, HYBE and LEGO as the working cases.

Why franchises beat hits

A hit is a spike. A franchise is an annuity.

A single blockbuster or hit album earns once, then decays. A franchise builds a flywheel: each release markets the next, and the audience does much of the promotion unpaid. The acquisition spend the module's opening lesson prices out falls with every cycle, because existing fans recruit the next wave and because a known character needs far less explaining in a six-second ad.

Four mechanics do the work:

• Transmedia design: one connected world across games, series, cards, sets and live events, each piece creating demand for the others.
• Owned community: a place fans gather that you control, rather than reachreachThe number of unique people exposed to your message in a given period. Unlike impressions, reach counts each person once, no matter how often they see it.View full definition → you rent from a platform.
• Superfan tiers: offers priced for the small minority who will spend many multiples of the median.
• Licensing: letting other companies manufacture and market your world while you take a royalty on their effort.

Transmedia storytelling: one world, many doors

Pokémon's design is a machine. Every new game generation ships alongside an anime arc, a trading card expansion built on the same creatures, and a merchandise wave. None of these is the campaign for the others; each is a product that happens to sell the others. A child may meet the world through a card traded in a schoolyard, through YouTube, or through Pokémon Go, which passed roughly half a billion downloads within months of its July 2016 launch and pulled a generation of lapsed 1990s players back in.

That launch also shows the limit. Go shed most of its peak daily users inside a year, as free mobile hits usually do. It still earns hundreds of millions annually, and, more useful to the franchise, it re-attached adults to a brand they had aged out of. Judge a door by who walks through it, not by the traffic in opening week.

LEGO runs the same architecture in both directions. It buys licences in (Star Wars since 1999, then Harry Potter, Marvel, Nintendo) and pushes its own worlds out: Ninjago, created in-house in 2011, then The LEGO Movie in 2014, then sets sold off the back of the film. The economics differ in a way marketers often miss. A licensed set carries a royalty to the rights holder, so an in-house theme selling the same volume is worth more per unit. Buying someone else's fandom is faster; owning yours is more profitable.

The principle: every asset should open a door to another asset. You no longer control where anyone enters.

The HYBE version

HYBE, the Korean company behind BTS, built the same structure around artists instead of characters, then built the venue too. Weverse, its fan platform, absorbed Naver's V Live in 2022 and runs at roughly ten million monthly users. Artist posts, paid memberships, subtitled video, direct messaging and the shop where albums and merchandise are sold all sit inside one app HYBE owns.

That is the gap between an owned community and a rented one. The alternative is a Facebook or Instagram presence, where distribution rules change without notice and the audience is not yours to export. (Meta, worth naming plainly, sells the ad products that make rented reachreachThe number of unique people exposed to your message in a given period. Unlike impressions, reach counts each person once, no matter how often they see it.View full definition → convenient in the first place.) Owned community costs more to build and hands you the profile, the purchase history and a direct line to the fan.

Fan communities: selling belonging

People do not queue overnight for a product. They queue for an identity.

Community is a moatmoatA lasting edge over competitors: a resource, capability or position they cannot easily replicate, letting a firm earn above-average returns over time.View full definition →. A competitor can copy a feature set. It cannot copy the feeling of being among people who care about the same thing. Pokémon's organised play circuit, from local leagues up to an annual World Championship, has held players inside the franchise for two decades: someone who played competitively in 2006 may now be buying booster boxes for a child.

Practical levers:

• Give fans a name and symbols. Identity needs vocabulary, and AFOL (adult fan of LEGO) began as a fan coinage, not a marketing one.
• Create shared rituals: pack openings, midnight releases, tournaments.
• Reward insiders. Continuity references and hidden details make devoted fans feel clever, and clever fans evangelise.
• Let fans co-create, then route it. LEGO Ideas sends any fan-designed model that passes 10,000 supporter votes to an internal review, and pays the designer 1% of net sales if it ships. Only a handful clear the whole process each year, which is the point: a funnelfunnelThe customer journey from awareness to purchase, typically Awareness, Interest, Consideration, Decision, Action, with prospects narrowing at each stage.View full definition → with a filter, not an open tap.

For a solid primer on community-led growth, the guidance in First Round Review's community articles is a useful free resource for translating these ideas outside entertainment.

🎬 [VIDEO: "How Marvel Built A Cinematic Universe" - youtube.com - a clear breakdown of the MCU's connected-story strategy and its business logic]

Superfan tiers: capturing willingness to pay

Not all fans are equal, and that is the point. A superfan tier is a set of offers designed for the small group who will spend many times what a casual buyer spends. It is disciplined price discrimination: let people self-select their level.

A rough Pokémon pyramid:

• Casual: watches the anime, plays Go for free.
• Engaged: buys a game, the odd booster pack.
• Devoted: buys elite trainer boxes, enters a regional event.
• Collector: sealed cases, graded cards, travel to Worlds.

LEGO builds the same slope out of piece count and price: the 2017 Ultimate Collector Series Millennium Falcon shipped at 7,541 pieces for $799.99, aimed squarely at adults. HYBE does it with album versions and randomised photocards, which turn one purchase into several for a completionist. The second-order effect deserves naming: bundling collectibles into physical albums inflates shipment figures, so the number your team celebrates may overstate the audience you actually have, and the waste attracts criticism.

The rule: design the top of the pyramid on purpose. Plenty of brands cap fan spending by accident, because nobody ever built the premium offer.

A note on scarcity and trust

Scarcity sharpens demand and can outrun you. During the 2020-2021 collecting boom, Pokémon card demand and reselling got heated enough that Target paused in-store card sales across the US in May 2021 after safety incidents. When the secondary market sets the price, you lose control of the shelf and of the relationship at once: actual players face empty racks while resellers arbitrage the shortage. The Pokémon Company's answer was to print more, reprint sought-after sets and say so publicly, which cools speculation.

Squeeze too hard, or let the buying experience break, and advocates become critics.

Putting it together: the franchise flywheel

1. A strong entry story pulls in someone new: a game, a debut, a first set.

2. Transmedia design gives that person another door: a card expansion, a series, a tour.

3. Community turns repeat consumption into identity, so the fan recruits others and stays for years.

4. Superfan tiers and licensing capture rising willingness to pay and fund the next entry story.

Two ways the wheel breaks, both worth planning for.

Concentration. HYBE's revenue leaned heavily on one group; when BTS announced in June 2022 that its members would focus on solo work, the share price fell about a quarter in a day. A fandom attached to a single act is a single point of failure, which is why HYBE has spent since on new groups and acquisitions. A franchise with hundreds of characters can rotate the lead; an artist cannot be rotated.

Over-extension. LEGO nearly died of franchise thinking done badly. By 2003-2004 it had scattered into video games, clothing, parks and far too many product lines, and posted a loss of roughly 1.8 billion Danish kroner in 2004. The turnaround cut lines, ceded control of the parks and went back to the brick. Doors into your world only pay if each one is a decent product standing alone.

How to apply it outside blockbusters

You do not need a $200 million budget. The structure scales down.

• A podcast network can connect shows so listeners cross over, run its own member space instead of a public hashtag, and sell a paid tier with bonus episodes.
• A software brand can license its certification, run a user conference, and let power users publish templates under its name.

Franchise thinking is a discipline before it is a budget line.

Key Takeaways

• Sell the relationship, not the transaction. Each release markets the next and fans recruit for free, so the cost of reaching the next audience falls with every cycle.
• Design every asset as a door. Pokémon ships games, anime, cards and merchandise as one connected release, and nobody controls which one a newcomer meets first.
• Own the room where fans gather. Weverse gives HYBE the profile and the purchase; a page on someone else's platform gives you neither.
• Build the top of the pyramid deliberately. A $799 collector set and a booster pack come from the same world at very different margins.
• Watch the two failure modes: revenue concentrated in one act or character, and extension into products that cannot stand on their own.