Hollywood’s biggest blind spot has never been storytelling — it’s been figuring out how to extend valuable intellectual property into new formats and technologies, former Walt Disney Company CEO Michael Eisner said Thursday, citing his own industry’s repeated stumbles in gaming as proof.

“We all failed,” Eisner said. “We ended up licensing. That’s how we succeeded.”

Speaking at the Paley Center for Media’s discussion “Sports in the Gaming Era,” Eisner used gaming as his central example of a pattern that has played out across Hollywood for decades: media companies possess enormously valuable IP, yet consistently misjudge how — or whether — to extend it into unfamiliar formats.

Eisner traced the pattern back to the industry’s earliest attempts to enter gaming. “Warner Brothers started it all with Atari, 1983. They went under,” he said, adding that it took two more years for Nintendo’s Mario Brothers game to revive the format. (Indeed, Warner sold Atari in 1984 for a loss, and Super Mario Bros. was first released in 1985.) The problem wasn’t creative, he argued — it was technological illiteracy: gaming “was so technologically driven in the beginning, which was not the strong suit of any of us.”

Eisner also said that the industry has changed today, going from the technological limits of the past to leveraging IPs as an asset. “Now it’s story-driven,” he said. “Now it is IP-driven.”

Eisner said the same failure to adapt has shaped how studios think about licensing versus building original IP — a tension he sees as core to Hollywood’s business model, not unique to any one medium. “We all take the IP that we made and put it in a place where you can enjoy it,” he said, referring to Disney’s approach across parks, merchandise, and media. “At a certain point in your life, you have to make the IP the new IP.”

The panel, moderated by OpenAI senior advisor Moritz Baier-Lentz, also featured Delphi Interactive founder and CEO Casper Daugaard, whose startup has quickly secured licenses for James Bond and FIFA games. Their discussion centered on how to leverage recognizable intellectual property to become the gaming industry’s most valuable asset.

Disney’s Eisner-led Hollywood takeover

For Eisner, the strategy reflects lessons learned over decades in Hollywood.

The founder of the Tornante Company recalled that he resisted sequels and franchise filmmaking early in his career. While working at ABC and later Paramount Pictures, he preferred developing original projects rather than working with existing stories.

“I never believed in sequels,” Eisner said, describing his programming philosophy as “everything’s going to be original.” But over time, he said, recognizable brands proved to be an effective way to attract audiences.

The philosophy mirrors much of Eisner’s own tenure leading Disney, as the former CEO restored the company to Hollywood primacy, roughly two decades after the death of its legendary founder. In the 1980s and ‘90s, he presided over the “Disney Renaissance,” releasing a string of commercially successful original animated films including The Little Mermaid, Beauty and the Beast, Aladdin, and The Lion King.

At the same time, Eisner also recognized the power of licensed intellectual property. He said the acquisition of Star Wars was one of the best decisions Disney has ever made.

“We had nothing in the last 20 years, so we bought Star Wars from George Lucas and that worked,” he said in a slight exaggeration — Disney acquired Pixar for $7.4 billion in 2006, Marvel for $4 billion in 2009, and Lucasfilm for $4 billion in 2012.) Referring to the fans, he said “they are so committed to the IP that I realize that there are certain kinds of things that are worth doing.”

Gaming’s IP-led attention

That same playbook is now becoming increasingly more important in gaming.

Daugaard explained that Delphi Interactive deliberately pursued a recognizable franchise in James Bond alongside IO Interactive before considering launching original properties, including a partnership with FIFA after the soccer governing body ended its three-decade licensing agreement with Electronic Arts.

Rather than designing games primarily for hardcore gamers, Daugaard said Delphi wants to build interactive experiences for hardcore fans of those franchises.

“We’re not making this James Bond game for gamers,” he said. “We want to make this game for James Bond fans.”

The strategy reflects broader changes throughout the video-game industry, where development costs have climbed while competition for consumer attention has intensified.

Baier-Lentz, a former professional gamer turned investor, noted that games increasingly compete not only against other games but also against social media, streaming services, movies, and content creators.

“Ultimately, there’s just 24 hours in the day and there’s two eyeballs in the head,” he said. “That’s never going to change.” Given time and attention constraints, he added, “IPs are just incredibly powerful.”

Eisner agreed that existing brands remain the most practical entry point into the emerging gaming industry, but argued it should only be a means to an end. “The key is after you have five or six IPs, you make a great game that nobody’s ever heard of,” he said. “It’ll be a giant game. But it’s going to take a while.”

Eisner described franchise licensing as “a great way to get in,” but cautioned that companies relying exclusively on established brands risk exhausting audiences through endless sequels. He pointed to Disney’s current handling of the Star Wars IP as having perhaps “overstepped its bounds” from too many sequels.

Over the past decade, studios have increasingly leaned on large IPs as their main audience draw. But after years of billion-dollar smashes, several recent Marvel and Star Wars releases have fallen short of that level, with audiences becoming less and less interested, leading analysts to question whether they are leaving for other genres or, to Eisner’s point, some kind of fresh IP.

Gaming has experienced a similar consolidation around marquee franchises. Most players spend the majority of their gaming time on just a handful of titles each year, making it increasingly difficult for new games to break through.

Daugaard argued that IP owners have grown more sophisticated in response to this same challenge. Rather than signing arms-length licensing deals for royalties, brands like FIFA now want to be “co-founders of the venture,” he said, with aligned incentives built for the long term — a structural shift he sees accelerating as AI and short-form content make it harder for any new IP to break through.

“There’s TikTok, there’s short-form content, there’s AI everywhere,” he said. “One thing people will gravitate toward is stuff they already know.”

This story was originally featured on Fortune.com