New IPs in the video game industry face a daunting task. Competing with well-established and popular franchises is no small feat, and even the most innovative new game needs some favorable reviews to stake its claim among fan favorites. While many indie developers are still looking for their own formula for success, Square Enix president Yosuke Matsuda believes he's discovered exactly what it takes to turn a new IP into a burgeoning franchise.

Matsuda recently spoke with popular Japanese gaming magazine Famitsu about what he thinks a new IP needs in order to succeed. In short, it involves the title of a video game franchise and the number 3 after it.

While cultivating the growth of a new IP is paramount to its success, Matsuda believes that taking a big picture approach is crucial. When asked about how to launch a new title, Matsuda replied:

"Looking retrospectively at the gaming industry, many games take off or get their big break at their third title...you need at least three games before you can tell whether an IP is going to be really successful or not."

Referring to this rule as his "Law of Third Titles", Matsuda believes that the first two installments of an IP should maintain a certain degree of flexibility and experimentation. Then, if the third game is expected to be a big hit, Matsuda thinks it leaves developers room to grow the scale of their game. Ultimately, Matsuda and Square Enix clearly believe that if the third title is successful, then "all is well".

Project Setsuna Concept Art

This kind of approach to IPs makes sense coming from Matsuda, as his company announced a new Square Enix RPG title, called Project Setsuna, was in the works during their E3 presentation. Obviously Square Enix has high hopes for Project Setsuna, and it sounds like RPG fans can look forward to multiple installments of the new IP if all goes well.

Looking beyond Project Setsuna, Square Enix's E3 presentation also showed just how much they believed in Matsuda's philosophy prior to Project Setsuna's announcement. They finally gave fans more information about Kingdom Hearts 3, and cult hit NieR had a follow-up announced, tentatively labelled NieR New Projectdespite middling critical and commercial success.

The "Law of Third Titles" might just hold some weight in the video game community as a whole, too. After a fairly successful first two entries, The Witcher 3 exploded onto the scene in May, and is an early contender for 2015 Game of the Year. Perhaps Matsuda is onto something.

Do you think video game franchises get their big break in their third instalment? Are sequels the true indicators of success for a video game series? Let us know in the comments.

Source: Famitsu (via Kotaku)