Building internal capabilities to transform your organization

A strong foundation

While our previous articles have focused on whether to buy or borrow intellectual property (IP) to help fuel growth, this article goes beyond IP and addresses how gaming companies can build internal capability to transform their organization—perhaps into one that has a lower cost profile to increase profit or one that is more creative-focused to enable IP creation.

By developing new content in-house, companies can have greater control over the use of their IP. This strategy can be seen with notable gaming IP like Fallout, Halo, League of Legends, and World of Warcraft, which have expanded into worlds or mediums outside of the game itself, such as series and movies.

To help maintain strong IP, to control costs, or to confirm the organization is meeting other operational goals demands adaptability and a solid foundation encompassing the right structure, processes, talent, and capabilities. This article explores how companies can transform to build a strong foundation to meet their strategies.

Three approaches to transformation

A transformation is a fundamental shift; for example, in a company’s business model, operations, or culture, often to adapt to changing market conditions (for example, the decrease in barriers for cross-platform play). Epic Games created its own sales platform, the Epic Games Store, for PC users and later expanded to mobile devices via Android’s app store.¹ In addition, Mojang Studio’s Minecraft expanded to support cross-play across console, mobile, PC, and additional platforms.² A transformation may include:

Riot Games and Electronic Arts provide compelling examples of successful transformations. Riot expanded its portfolio of successful games by stepping into a new genre with 2020’s Valorant (PC, PlayStation, Xbox), venturing into the mobile gaming market by introducing League of Legends: Wild Rift, and cultivating a community through initiatives and investments in esports.³

Electronic Arts has embraced the live-service gaming model that allows it to evolve IP over time through new content and updates, keeping players coming back for more through games such as Apex Legends and EA Sports College Football 25.⁴ Its ability to adapt to changing market dynamics, embrace new technologies, and prioritize customer satisfaction has contributed to its ongoing success.

Transformation considerations

Transformational success can hinge on appropriate operating models and organizational structures to facilitate change. Gaming companies often face complex talent acquisition landscapes, evolving marketplace conditions driven by technology, and high expectations from players. Consider the following:

• Organizational design and people: A structure that captures efficiencies across the organization (perhaps including a parent organization) can help enable shared resources to reduce redundancies. A company’s culture can multiply these benefits, so plan for a desired culture early and design team structures and practices around that desired culture. A positive culture also attracts and retains top talent.
• Strategic positioning: Changing consumer preferences and marketplace conditions often necessitate a strategy alignment, which can be achieved through transformation. A strategy shift could be to position existing IP on new channels where consumer demand is growing.
• Processes and controls: Implementing a transformation can sometimes present challenges as companies learn to navigate new markets and channels and employees adjust to new structures and roles. Clearly defining the processes and controls can alleviate much of this friction. Having a centralized change management team, for instance, can help efforts remain coordinated across business areas.

A few notable examples of transformations can be seen with Nintendo, Epic Games, and CD Projekt RED. Nintendo, for instance, consolidated its handheld and console hardware development departments to create the Nintendo Switch, which outsold its predecessor in its first year of release and sold more than 150 million units as of 2024.⁵ This move allowed it to pool resources and streamline IP development, contributing to success.

Epic Games, which originally found success in the first-person shooter Unreal, released in 1998, diversified by not only using its proprietary engine in its own games (Unreal Engine) but licensing it to other gaming companies and even in the use for virtual sets seen in traditional media. The Unreal Engine has continuously been updated, allowing Epic to successfully diversify its revenue stream.⁶

CD Projekt RED’s transition to the Unreal Engine was driven by a desire to prioritize content creation and minimize development expenses. By moving away from its in-house REDengine, it unlocked faster prototyping and easier talent acquisition, directly supporting these goals.⁷

These examples demonstrate the power of strategic transformation in the gaming industry. Companies can consider adapting organization structures, leveraging industry-leading tools, and focusing on core competencies to help drive innovation and long-term success.

Endnotes

1 Jay Peters, “Fortnite is back on the iPhone—with a whole app store in tow,” The Verge, August 16, 2024. 

2 Marsh Davies, “The Better Together Update is here!,” Minecraft.net, September 20, 2017. 

3 Riot Games, Inc., “Who we are,” accessed January 2025. 

4 Filip Galekovic, “Over 70% of EA’s revenue comes from live-service titles,” Game Rant, May 11, 2022. 

5 Nintendo Co., Ltd., “Financial results explanatory material,” February 4, 2025; Ryan Dinsdale, “Nintendo Switch surpasses PS4 and Game Boy to become 3rd best selling console of all time,” IGN, February 7, 2023. 

6 Brett Byll, “Epic Games releases Unreal Engine 5.4,” Game Rant, April 24, 2024. 

7 Kirk McKeand, “Interview: What Unreal Engine means for the next Cyberpunk and The Witcher games,” Video Games on SI, July 10, 2024.