There’s a version of monetization that players barely notice. Not because it’s hidden, but because it fits. It makes sense where it lives. It shows up when you want it and disappears when you don’t.
And then there’s “everything else.”
If you’ve played Diablo Immortal recently (or ever), you know exactly what “everything else” looks like. The prompts. The upsells. The constant, low-grade pressure to spend just to keep moving. It isn’t monetization; it’s a toll booth in the middle of your living room.
The difference between those two experiences isn’t a UX tweak or a pricing strategy. It’s a philosophy. The best monetization systems are built as extensions of the world. The worst ones are just bolted on top of it.
The Opt-In Is the Product
When I think about what makes commerce feel “good” inside an IP ecosystem, it’s rarely about what is being sold. It’s about how it’s surfaced.
Players and fans who buy things, whether a digital skin or a physical statue, are opting into a deeper relationship with the experience. They’re raising their hand. The mistake most brands make is treating that raised hand as an invitation to grab the fan by the arm and drag them to the register.
The ideal version respects the flow. The shop shouldn’t interrupt the game; the merch shouldn’t interrupt the fandom. When games like VALORANT surfaces cosmetics, they’re tied to low pressure (and even free) battle passes or rotating shops. The purchase generally feels like a natural extension of an existing emotion towards the game and IP.
The trap on the physical side is even easier to fall into. A player who loves a game enough to want a hoodie or a collectible is doing something significant - they’re crossing from digital to physical, from virtual to tangible. That’s a meaningful threshold. Hitting them over the head with product placement while they’re just trying to play the game is a great way to make sure they never cross it.
Prediction, Not Push
Here’s the real unlock: the best version of this isn’t just good placement. It’s prediction rather than push.
If you know a player has 400 hours on a specific character, showing them a generic logo tee isn’t commerce, it’s noise. Showing them a high-quality piece tied specifically to that character, at a moment when they’re already engaged, is signal.
We saw a version of this work with “RiotMart” - pairing the shop experience with actual gameplay data to surface Jinx gear to Jinx mains. It worked because it didn’t feel like an ad; it felt like the store actually knew you.
AI is going to close a lot of that gap. The brands that get ahead now - building the infrastructure to actually understand their audience’s behavior - will have a massive advantage. The ones that keep carpet-bombing their entire customer base with the same generic “20% Off” email/banner are going to keep wondering why conversion is flat.
When the World Builds Itself Around Commerce
A shining example I will hopefully always keep coming back to is the League ecosystem. They’ve built a system where cosmetics feel like they belong. Skins tied to events, champion-specific drops, and limited releases that feel like cultural moments rather than clearance sales.
The cautionary tale? The early days of Star Wars Battlefront II. The backlash wasn’t just about loot boxes; it was about players feeling like progression was locked behind a paywall. The monetization wasn’t part of the world - it was eating the world. The blowback was so severe they had to fundamentally gut and rework the entire system.
That’s the real cost of getting this wrong. It’s not just a bad quarter; it’s broken trust with the people who wanted to love your thing.
The Takeaway
Monetization isn’t separate from world-building. It is world-building.
Every purchase prompt, every shop placement, and every physical product you put in front of a fan is either reinforcing the world they want to live in or reminding them they’re being sold to.
The goal is to make that line invisible - not through manipulation, but through genuine alignment. Know your audience. Surface things that matter. Let them opt in on their terms.
Because the fans who feel seen buy more. The ones who feel sold to leave.
The Invisible Assumption
There’s a comfortable delusion that lives in many North American companies: If it works here, it works everywhere. The logic follows that if your product dominates at home, it’ll resonate globally. If your platform of choice converts in your region, it’s the only one that matters. It’s a clean, efficient, and highly profitable way to think.
It’s also almost always wrong.
Don’t Export Your Ego
The mistake isn’t usually malice; it’s just the byproduct of operating inside your own bubble for too long. You build products for your neighbors. You market where your friends are. You sell through channels that feel “standard” to you.
Then, you try to expand and act shocked when the playbook that made you a hero at home makes you a ghost abroad. Fandoms aren’t a monolith. When you treat a global audience like your home market with different accents, you aren’t being efficient—you’re being tone-deaf.
Douyin: The Infrastructure of Influence
Look at the success of Douyin. In the West, we often dismiss it as “Chinese TikTok.” But as we discussed in our Live session, Douyin has evolved into a fundamentally different animal—a “QVC of the Future” that is baked into the consumer’s daily life.
The insight here isn’t just about what is being sold; it’s about why certain products thrive there that died in the West.
The Interaction Paradox: We have seen success with products on Douyin that simply could not move the needle in North America. Why? Because the North American “Storefront” model is passive. It requires a fan to seek out a URL, navigate a menu, and decide to buy.
Native Discovery: On Douyin, the commerce is the content. The consumer enjoys the interaction of the live stream—the energy of the host, the real-time community chat, and the gamified “drop” mechanics. Products that feel “boring” on a standard web page become “must-haves” when they are part of a high-energy, native entertainment loop.
The Trust Layer: In these ecosystems, the platform handles everything from payment to logistics in a single, high-trust flow. It removes the friction that usually kills international conversion.
When you try to force a passive North American e-commerce strategy into a market that expects an active, immersive experience, you’re ignoring the very reason they engage. You’re trying to sell a product in a vacuum when the consumer expects an event.
The “Ear to the Ground” Strategy
So, how do you avoid being the “Ugly American” of commerce?
Stop the “Translation Service” Trap: Stop treating regional leads like a service to translate your US marketing deck. If your lead in Shanghai tells you the platform strategy is wrong for a Douyin stream, believe them. They understand the native interaction model; you’re just looking at a spreadsheet.
Immerse Before You Invest: Before you commit a dollar of CAPEX, do the work. Watch how they buy, not just what they buy. Understand why a platform like Douyin wins where a standard web store fails.
Prepare to be Wrong: Your expertise doesn’t transfer by magic. Your job isn’t to protect a “Global Brand Standard” until it becomes a relic; it’s to be the scout.
The Agility Advantage
For smaller companies, this is a superpower. You are agile enough to pivot when the market tells you your channel strategy is off. For the giants, it’s like steering an icebreaker—course corrections are slow and expensive.
Stop trying to force the ocean to fit your ship. Every region has its own soul, its own fandoms, and its own rules. If you want their loyalty, stop trying to export your backyard. Start building in theirs.
What Good Looks Like
McDonald’s (Southeast Asia): They abandoned the “Drive-Thru” obsession and pivoted to a delivery-first node. By deeply integrating into regional super-apps like Grab and Gojek, they transformed from a physical restaurant into a high-speed logistics partner, meeting the consumer exactly where they live: on their phones.
Riot Games (South Korea): Instead of forcing the Western “gaming-at-home” model, they leaned into PC Bang (Internet Cafe) culture. By offering localized perks—like unlocked characters and XP boosts specifically for cafe players—they turned a local social habit into a massive competitive engine.
Coca-Cola (India): Recognizing that “Standard” sizing didn’t fit the local economy, they launched the “Chota” (Small) bottle. They hit a specific psychological price point and rebuilt their logistics for bicycle and handcart delivery, proving that solving for physical and financial friction is more important than brand consistency.
The “Power Partner” Trap
There is a common assumption in many boardrooms: if Brand A is powerful and Brand B is influential, putting them together is an automatic win.
In reality, many of these “power partnerships” result in a sterile middle ground. They generate a spike in mentions, but they don’t actually resonate. When you chase a partnership just because it’s “cool” or brings a massive social media following, you aren’t building a brand. You’re just trading on temporary attention.
When the Streets Don’t Talk to the Rift
Take the intersection of streetwear, DJs, and gaming. On paper, it’s the ultimate cultural trifecta. We once executed a collaboration with a well known street wear brand for a virtual band. It had all the hallmarks of a “hype” success: high-demand drops, massive social footprint, and cultural relevance.
But it lacked resonance. Why? Because the Venn diagram of that specific IP’s fans and the brand’s collectors had almost zero overlap. We were speaking two different languages to two different crowds. We saw a similar friction with celebrity DJ partnerships for live events—the fans showing up for the IP didn’t care about the name on the decks, and the DJ’s fans weren’t there for the lore. They were two totally different worlds that happened to be in the same room.
Boots on the Ground vs. The Spreadsheet
Trend analysts are valuable, but they can’t replace immersion. Your job is to be a fan first. You have to be on the ground at live events. Don’t just read Reddit—that’s often a vocal minority. Go to the stadiums, the pop-ups, and meetings. Look at what the fans are actually wearing. Listen to what they are discussing in the concourse.
When looking at Arcane, we identified a need for high-end jewelry—an area that hadn’t been explored much. It wasn’t a “hype” play; it was a response to a genuine desire sensed in the community. It worked because it felt like a reward for the fandom, not a forced collaboration.
The Track Record: Generalists vs. Experts
When you’re looking for a partner, the most important indicator isn’t their size—it’s their focus:
The Generalists: Are they licensing every IP under the sun? There’s a place for high-volume partners, but it’s rarely where high-impact authenticity lives.
The Niche Experts: Do they understand the “soul” of what they work with? Do they have “fans” inside their own building?
The “First Timers”: Sometimes the best partner is someone who has never done licensing before. It allows you to set the standard for what “good” looks like from day one.
Three Principles of IP Stewardship
Stay a Fan: It is incredibly easy to get lost in the day-to-day business and forget why the IP matters. If you aren’t excited about the product, they won’t be either.
Trust the Fans: Listen to what they tell you—actively and passively. They will tolerate a “money grab” occasionally, but if it becomes the trend, you’ve lost the most valuable asset you have: their trust.
Go With Your Gut: Don’t dismiss the “absurd” ideas. Some of the highest-impact partnerships come from left-field intersections that no one expected but every fan loved.
At the end of the day, you have a choice: you can be a merchant or a steward. A merchant looks for a transaction; a steward looks for a legacy.
If you take care of the fans first, the financials will follow. If you take care of the financials first, the fans will eventually leave.
There’s an expensive delusion that lives in a lot of C-suites: the belief that the IP itself is the primary driver of the business.
In my decade-plus in this business, I’ve seen this play out in the balance sheets. Executives often drink their own Kool-Aid, assuming that if you just slap a legendary logo like League of Legends, DC, or Marvel on a product, it’s a guaranteed ticket to the stratosphere.
The reality is that fans don’t buy “IP.” They buy characters.
The Transactional Divide
Before we dive in, a clarification: I’m talking about Consumer Products and Ecommerce.
In Marketing, broad IP branding is fine. It’s a wide net designed for reach and awareness. But the rules change the moment you ask a fan to open their wallet. Marketing is about the “hook,” but ecommerce is about the “hold.” If you try to sell a generic “brand” product using the same broad strokes you use for a trailer, you’re going to end up with a warehouse full of inventory nobody wants.
The NFL Rule
I call this the NFL Rule.
Broadly speaking, people don’t want a hat that just says “NFL.” They want a hat for their specific team. When you paint with broad strokes, you miss the tribal loyalty that actually opens wallets. In ecommerce, your “team” are the marquee characters that carry the weight of the IP.
In my experience, this manifests in two ways:
The Wrapper vs. The Gift: Think of the IP as the gift wrap. It looks great and catches the eye, but nobody buys a box just for the paper. They want what’s inside. If the character (the gift) isn’t the focus, the “wrapper” doesn’t matter.
The Brand Myopia: I’ve seen multiple attempts to launch products that were strictly League of Legends or VALORANT branded, specifically minimalist, logo-forward, “cool” brand plays. They almost universally struggled.
The mistake is misunderstanding the Halo Effect. Most executives view the IP as one big glowing halo, but in reality, that halo is powered by dozens of individual character lightbulbs. If you aren’t powering the specific bulbs fans care about, the halo doesn’t actually shine. It’s just a flickering corporate logo.
Fans want a “wink and a nod,” not a billboard. Putting a game logo on an otherwise stylized shirt often makes it perform worse. In soft lines especially, players want a creative interpretation of the character they main, not a shirt that screams “I play this video game” to everyone at the grocery store.
Format Fatigue
Even with a powerhouse character, you can’t just print money forever. I’ve seen a threshold where sales drop off drastically after the third or fourth time you interpret a character in the same format.
A fan only needs so many 5-inch versions of the same hero. Once you hit that Format Fatigue, you have to find a new medium or a new narrative hook - like Arcane - to reset that affinity. It’s not about how famous the character is; it’s about the freshness of the story the product is telling.
The Sin of the Niche Character
The hardest problem for an operator is satisfying fans of niche characters without drowning in excess inventory. In a world of high Minimum Order Quantities (MOQs), you are often “saddled with the sin” of being unable to please everyone.
If you ignore the data and manufacture for the vocal minority, you end up with pallets of “dead stock” that you eventually have to liquidate for pennies. To survive this without taking massive logistical lumps, there are a few levers you can pull:
Blind Boxes: Representing 10–12 characters in one run to spread the risk across the roster.
Drops (when done correctly): Using scarcity to set a limited expectation from the jump.
Crowdfunding: This is the ultimate “put up or shut up” for niche fans. It isn’t just about the deposit; it’s about forcing the vocal minority to validate their demand with their credit cards before you ever hit the factory floor.
The Legacy Exception
Is IP affinity always a myth? Not quite. There are “Legacy IPs,” like Star Wars, Star Trek, or G.I. Joe, where the audience views the brand itself as the “team.”
But even here, it’s usually about the nostalgic interpretation of the IP, such as a vintage logo. For modern interpretations, the rule holds. People will wear a Thor shirt, but they rarely want a shirt with a corporate logo on it.
The Bottom Line
Success in ecommerce isn’t about how many people recognize your logo; it’s about how many people see their favorite character and feel they must own that specific piece of the story.
Stop selling the gift wrap. Start selling the gift.
What Good Looks LikeHasbro Pulse HasLab A platform that eliminates the “Sin of the Niche Character” by requiring fans to provide on-record financial validation before a high-MOQ item ever hits the factory floor.
Riot Games: Spirit Blossom Collection A masterclass in the “wink and a nod” approach, using event-specific aesthetics and character themes rather than a generic game logo to drive sales in soft lines.
Pop Mart: Powerpuff Girls x Crybaby Series This blindbox series perfectly executes the "sin of the niche character" by bundling the marquee trio with niche supporting characters like The Mayor or Mojo Jojo.
A Tactic, Not a Strategy
Let me get this out of the way first: I’m not here to demonize the “drop” tactic. It may have become the industry’s favorite shortcut for looking culturally relevant, but it absolutely has its place. The mistake is when companies start treating it like a strategy. If anything, I may have indirectly contributed to its rise. Well over a decade ago at Loot Crate, we would seed teasers of what was coming along with a countdown that insisted you absolutely had to subscribe now or miss out on something incredible.
We built the hype. And guess what? It worked.
If I ended the post here, I’d be putting about as much thought into it as several dozen executives I’ve dealt with over the years. They see the spike in the graph, the “Sold Out” badge, and the social media buzz, and call it a win. If nothing else, it’s a great marketing play, right?
The Illusion of Total Narrative Control
Loot Crate worked because, for a time, we owned the narrative. In a subscription model, the “drop” is a promise of future value. We controlled the reveal, the timing, and the perceived scarcity. What I’m seeing a lot now, though, is companies creating drops for the sake of drops. In a transactional ecommerce environment, they often lose that control.
When you drop a product and it doesn’t sell out in five minutes, the narrative shifts fast from “exclusive” to “unwanted.” You’ve built a system where your only KPI is immediate sell-through, leaving zero room for the reality of long-term brand building. You’re effectively gambling, sometimes on a weekly basis, and the house eventually stops winning.
Inventory Purgatory (What the fans never see)
This is where most teams take their hardest hits.
A “Sold Out” drop looks great on a slide deck. What doesn’t look great is the “Mostly Sold Out” drop that leaves you with 20% excess inventory sitting in a warehouse, quietly eating your margins alive in storage fees. And as someone who has been stuck explaining that 20%, I can tell you: “I told you so” does not get you very far with the powers that be.
In the hyper-growth years, companies could hide those sins behind the sheer volume of new customers. But in a mature business, those leftovers become Hype Debt. You can’t just drop your way out of excess inventory. Eventually, you have to deal with the physical reality of pallets of stale stock waiting to become a discount, write-off, or trash.
The Lead Time Trap: Pre-orders vs. Inventory Purgatory
When an executive realizes that guessing on inventory is leading to a warehouse full of margin-eating excess, they usually pivot to the “obvious” solution: made-to-order.
It’s the perfect hedge on paper. You open the drop, collect the cash, and only manufacture exactly what was paid for. Zero excess inventory. Zero risk of not selling out.
Except you haven’t eliminated the risk. You’ve just offloaded it onto the fan.
By manufacturing against orders, you’ve effectively traded Inventory Debt for Time Debt. In the world of global ecommerce, made-to-order is often synonymous with a 6 to 12-month lead time. And this is where the conversion decay sets in.
You’re asking a superfan to pay today for a version of themselves that might not even exist by the time the product ships. Interests shift. Fandoms move on. Life happens. When the box finally arrives nearly a year later, the emotional high of the drop has long since evaporated, replaced by a much more familiar feeling: “Where is my stuff?”
If you use long lead times as your primary inventory hedge, you aren’t building a sustainable revenue model. You’re building a resentment engine. You might have saved the P&L from excess inventory, but you’ve poisoned the well for the next launch.
Stewardship Over Sales
Ok, so when do drops make sense? Surely there’s a reason they’re everywhere. Look at streetwear, sneakers, or anything from Supreme!
First of all, I’m willing to bet you’re not a streetwear company, and you’re certainly not Supreme. And if you are, I want to see your warehouses or customer support sentiment, because I have a sneaking suspicion… (that’s for another post)
But for every other company, drops absolutely do have a place. That place lives at the intersection of fandom and scarcity. The real magic is knowing when scarcity is amplifying genuine demand and when it is just being used to cover for weak product-market fit, bad forecasting, or internal pressure to manufacture a win. It’s not when you’re trying to make a product feel special. It’s when the moment is special.
When you run a high-integrity, truly limited drop, you’re rewarding the superfan’s attention. You’re proving you value the soul of the IP more than the volume of the transaction. It becomes the physical reminder of a “you had to be there” moment. Not to spike revenue, but to build trust.
When you treat the drop as a strategic reward rather than a desperate revenue lever, you stop being a merchant and start being a steward of the fandom.
Just make sure you have the infrastructure to actually ship the damn thing.
What Good Looks Like
Hasbro Pulse HasLab – They eliminate “Hype Debt” by using a transparent crowdfunding model, ensuring supply perfectly matches demand before a single unit is manufactured.
A24 Shop – They manage the “Resentment Engine” by gating high-demand drops behind a paid membership (AAA24), effectively rewarding their most loyal cohort with priority access.
MSCHF – The gold standard for the “Drop as Spectacle”; they prove that if the mechanic of the drop is fun enough, the event has value even for the fans who don’t walk away with a product.
Most ecommerce sites are designed like high-efficiency pharmacies: get in, find what you need, check out, leave. It’s functional, but it’s sterile. And unless you have a chronic need for that specific “medicine,” you aren’t coming back until something breaks or a 20% off coupon hits your spam folder.
At Riot, we looked at this problem through a different lens. We didn’t want a pharmacy; we wanted a destination. We looked at why players spent hundreds of hours in League of Legends or VALORANT and asked: How do we bring that “just one more round” energy to a merch store?
That thinking led to RiotMart, part of a broader ecosystem we called “My Shop.”
The Mechanics of the Flip
The concept was dead simple: Every week, you’d get three digital cards. You click to flip them over, and underneath is a mystery discount on a specific product.
But the “fun” wasn’t just in the savings. It was in the ritual.
The Rarity Scale: We used the dopamine language of MMOs. A discount on a $200 high-end statue was “Epic” (Purple). A discount on a keychain was “Common” (Green). Even if you didn’t buy, you wanted to see if you “rolled” a legendary.
The Weekly Reset: It wasn’t a permanent sale. It was a localized, expiring event. If you didn’t check your cards by Sunday, they were gone.
The Opt-In (Anti-Friction): This is the most important part. I have a personal loathing for the "Spin the Wheel!" pop-overs that hit you the second you land on a homepage. They are obtrusive, they add friction, and they feel like a digital version of a mall kiosk guy trying to clean your shoes. We built a dedicated space for this. It was an opt-in experience. You had to want to play, which made the reward feel earned rather than forced.
The Accidental Retention Engine
Here’s the honest truth from the operator’s chair: RiotMart didn’t radically spike our conversion rates. If you’re looking for a silver bullet to double your revenue overnight, this isn’t it. But what it did do was something much harder to buy: It cultivated a recurring cohort.
We saw tens of thousands of players returning to the site every single week just to flip their cards. Most didn’t buy that week. But by giving them a “game loop” in the lobby, we kept the brand top-of-mind. We turned a “once-a-year” shopper into a “once-a-week” visitor.
When we eventually launched a new Jinx hoodie or a limited-edition drop, that cohort was already there. They didn’t need an email blast. They were already “in the building” checking their cards.
Stop Being a Vending Machine
A lot of brands are “chasing the dragon” of AI-driven, hyper-intelligent product suggestions. If you have the data and the engineers, go for it. (We paired RiotMart with gameplay data to show Jinx mains Jinx gear, and it worked).
But for everyone else? You don’t need a supercomputer. You just need to stop being a vending machine.
The Takeaway: Give your users a reason to engage that isn’t purely transactional. Give them a ritual. Give them a mystery. Make the act of browsing feel rewarding even when they do not buy.
Because in a world of infinite tabs, the brand that wins isn’t the one with the best checkout flow. They are the ones people actually want to come back to.
What Good Looks Like
