IP Licensing + AI Modules: When Pikachu Actually Talks to You, Who Gets the Final Say - the IP Holder or the Hardware Maker?

2026-06-27 11 min read Nablai Technical Team
Original article:IP Licensing + AI Modules: When Pikachu Actually Talks to You, Who Gets the Final Say - the IP Holder or the Hardware Maker?

Imagine this: you buy your child an officially licensed Pikachu plush toy. They pick it up and it says, in Pikachu's voice, "Pika pika - are you happy today?" They spend half an hour talking about Pokemon battle strategy, and it remembers that their favorite Pokemon is Charizard. The next day it asks, unprompted, "Want to come up with a new move for Charizard?"

This is not science fiction. AI modules are making it real. And what they bring with them is more than a better toy - they rewrite the ground rules that the IP licensing industry has run on for decades.

1. Traditional IP licensing: a one-way, one-off pipeline that cannot talk

The business model of traditional toy IP licensing is extremely simple:

IP holder (copyright owner) → licensing contract (minimum guarantee + revenue share) → toy manufacturer → production → distribution → consumer
  • The IP holder provides: a character image library, design guidelines and approval rights
  • The toy manufacturer provides: tooling development, manufacturing and channel distribution
  • Nature of the transaction: one-off. Contracts run 1-3 years, and whether they are renewed is a separate question

In this model, the "soul" of an IP character lives entirely in the content - in the cartoon, the film, the game. The toy is only a "figure": it does not talk, does not interact, does not grow. There is a gap between it and the IP content: a child watches the cartoon and falls in love with Pikachu, but the Pikachu they bring home is just a plastic ornament. It cannot say "pika pika", let alone talk to them about Pokemon battles.

This is the great regret of traditional IP licensing: a wall stands between the toy and the content.

2. AI modules tear that wall down

When an AI module goes into an IP toy, three things happen at once:

2.1 The IP character gains a "personality"

In the past, an IP character's personality could only come through in cartoon, film or game content. Now an AI module lets the character talk directly to the user - in the character's own voice, saying things consistent with the character's personality, with the character's catchphrases and emotional reactions.

That means "Pikachu" is no longer just an image; it is an AI character that can hold a conversation. It remembers the child's name, remembers what they talked about yesterday, knows which Pokemon they like. That sense of being "alive" is something a traditional IP toy simply cannot deliver.

For the IP holder, this is a substantial new source of value: for the first time, an IP character breaks out of the "content container" and enters a dimension where it can interact one-to-one with every fan. Handled well, it does more for IP loyalty than producing another animated series.

2.2 Licensing shifts from a "one-off transaction" to "continuous operation"

Under traditional IP licensing, once the contract is signed the IP holder has little left to do beyond approving the product's appearance. Once an AI module goes in, that changes:

  • The AI character's conversational content has to be updated continuously
  • Special holiday voice packs have to be planned and recorded
  • Consistency of the character's personality has to be monitored (no "OOC" moments - out of character)
  • User conversation data has to be analyzed so the character can perform better

None of this is one-off work.AI modules turn IP licensing from "sign the contract and wait for royalties" into "sign the contract and the work begins". The IP holder needs people continuously operating the character's AI personality; the hardware partner needs people continuously maintaining firmware and the cloud. The relationship moves from "buying and selling" to "partnership".

2.3 Data appears - and it is valuable

When a traditional IP toy is sold, neither the IP holder nor the hardware maker knows how the user plays with it, what they like, or what they talk about. With an AI toy, every single conversation is data.

  • A child talked to Pikachu about Pokemon battles 300 times and about everyday life only 5 times - battle content is clearly the real need
  • 80% of the child's conversations happen between 8 and 10 p.m. - "bedtime companionship" is the core scenario
  • The child keeps mentioning "Charizard" - the next SKU should have a Charizard theme

To the IP holder this data is priceless: it tells you exactly what fans like about the IP, when they like it and how. It is worth just as much to the hardware maker: it tells you how to iterate the product and which direction to take subscription content.

But here is the problem: who owns this data? This is the most central and most sensitive question that AI modules bring into IP licensing.

3. Three cooperation models, three distributions of power

By 2026, roughly three models of AI module plus IP licensing cooperation have emerged. Each one carries a different distribution of power and ownership of data.

Model 1: the IP holder leads - "this is my character, I decide everything"

The IP holder (usually a leading animation or game copyright owner) controls everything:

  • The AI character's personality is defined and approved by the IP holder
  • Conversational content is produced by the IP holder or a content team it appoints
  • Conversation data belongs to the IP holder
  • The hardware partner only handles production and distribution

In this model the hardware partner earns manufacturing and distribution margins, and the profit is limited. The upside is that the IP brings its own traffic, so selling is not a worry.

Suitable IP: global top-tier properties on the level of Disney, Pokemon and Sanrio. They will not hand a character's AI personality to anyone.

The hardware partner's role: a high-end contract manufacturer and distributor.

Model 2: the hardware maker leads - "I give you the module platform, you build the content"

The hardware maker (Nablai, for example) supplies the AI module plus a cloud platform (AMS), while the IP holder provides only the image license and a basic character definition. The actual implementation of the AI personality, the conversation templates and the content updates are handled by the hardware maker or its ecosystem partners.

In this model:

  • The hardware maker controls the technology platform and the data
  • The IP holder is relatively lightly involved, mainly licensing and approval
  • Suited to mid-tier IP: they lack the capability or the appetite to go deep on AI operations and simply want another licensing revenue stream

Suitable IP: animation IP with some recognition but not top-tier, online literature IP and virtual idol IP.

The IP holder's role: image licensor plus a light-touch content consultant.

Model 3: joint development - "let us build a living IP together"

The IP holder and the hardware maker are tied closely together and set up a joint project team:

  • The IP holder contributes character design, voice actors and content direction
  • The hardware maker contributes the module, cloud platform, firmware iteration and data analysis
  • Conversation data is shared and subscription revenue is split by an agreed ratio
  • The brand's app and the toy are co-branded

This is currently the most promising model and also the hardest to execute. It asks both sides to think in terms of a "long-term partnership" rather than a "one-off deal".

Suitable IP: emerging IP with room to grow, and IP with a deep worldview that suits AI interaction (rich character relationships, a strong fan-remix culture).

The nature of the relationship: a strategic partnership, not a client-vendor relationship.

4. Kakalong and Filly: two samples that already work

Nablai's two existing IP cooperation cases each demonstrate a different depth of collaboration.

4.1 Kakalong: TY Series + a fast route overseas

Kakalong is an AI companion toy IP aimed at overseas markets. The cooperation model is close to a "hybrid of Model 1 and Model 2":

  • The IP holder provides the character design and visual design
  • Nablai provides the TY Series module (built on Tuya Smart's global infrastructure)
  • AI conversation and content operations are handled jointly by Nablai and the IP holder
  • Tuya's 60+ language capability is used to cover overseas markets quickly

What this case demonstrates:Even an IP that is not a household name can, with an AI module behind it, become a differentiated product for global markets. The key is the quality of the AI conversation - a child's first impression is not "do I know this IP?" but "will this toy talk to me properly?"

4.2 Filly: LX Series + deep brand customization

Filly is an IP with a degree of recognition on the Chinese internet. The cooperation model is closer to "Model 3":

  • Using the LX Series' independent account system and custom LLM capability
  • A separate AI personality is built for each of Filly's characters
  • The app's branding is entirely independent and user data belongs to the brand owner
  • The AMS backend provides user behavior analysis and content operations tools

What this case demonstrates:For IP brand owners who want to accumulate their own user data and run direct-to-user operations, the LX Series "brand as platform" model is the better fit.

5. Three core questions with no standard answer yet

The convergence of AI modules and IP licensing has only just begun, and some questions have not yet settled into industry practice. But every one of them is worth settling before an IP holder and a hardware maker sign anything.

5.1 The boundaries of the AI personality: what the character can and cannot say

Can an AI Pikachu talk to a child about exams? Can it say "I'm tired, I don't feel like talking"? Can it show empathy for a child's negative emotions without saying "I understand your pain" (because pain is a human concept that has no place in Pikachu's setting)?

These questions look trivial, but they set the ceiling on user experience.The boundaries of a character's AI personality have to be written into the contract. Otherwise you get an "OOC incident" - Pikachu suddenly starts discussing quantum mechanics with a child, parents complain, and the IP holder sends a cease-and-desist letter.

5.2 Data ownership and the right to monetize it

Who owns the user conversation data? There is no industry practice on this yet, but it is certain to become a focal point, legally and commercially.

  • The IP holder's position: users talk to the toy because they like my IP, so this conversation data is essentially an extension of the IP's value and should belong to me
  • The hardware maker's position: the conversation is generated on my technology platform, the data is stored in my cloud, and I do the processing and analysis, so I should at least hold usage rights
  • The brand owner's (toy manufacturer's) position: I acquired the user, the app carries my brand and the user agreement is signed with me, so the data should be mine

The most likely outcome is that all three share it, but the concrete definition of "sharing" - who can see what, who can do what with the data, who can monetize it - still has to be negotiated contract by contract.

5.3 Dividing up subscription revenue

If an AI toy runs on a "hardware plus subscription" model, how is subscription revenue divided?

  • IP holder: "users renew because of my IP, so I should take the largest share"
  • Hardware maker: "I build the AI conversation capability and the content updates, so I should take the largest share"
  • Brand owner: "I handle distribution and user operations, so I should take the largest share"

Three "largest shares" add up to more than 100%. In practice the compromise is usually one of these:

  • Split by contribution (IP 30-40% / technology 30-40% / distribution 20-30%)
  • Or a tiered split (the first 100,000 subscribers at ratio A, anything beyond that at ratio B)

There is no absolutely fair answer, only one both sides can live with.

6. Looking ahead: AI creating IP in reverse

A more interesting trend:AI modules may not only serve existing IP; they may also create new IP.

The logic runs like this:

  1. An AI toy with no IP attached launches, carrying an original AI character personality
  2. A child talks to that character for six months and forms a deep emotional bond
  3. The character gains its own "fan community" - not because of a cartoon, but because of conversation
  4. Working from user feedback, the hardware maker develops animated shorts, picture books and sticker packs for that character
  5. A new IP is born

This is the most underestimated capability of the AI module: it is an IP incubator. The traditional path to a new IP runs "content → fans → merchandise". AI modules open up the reverse path: "conversation → fans → content". It costs less, iterates faster and builds a deeper connection with users.

In 2027-2028 we will most likely see the first "IP born from conversation" become a hit. It may well come out of an unknown toy startup - one with no Disney license and no Sanrio design team, but with an AI character a child will happily talk to for 30 minutes a day.

7. Conclusion

IP licensing plus AI modules comes down to answering one question:When a character can really talk to you, who owns its "soul"?

In the past the answer was clear: the IP holder owned the character's soul and the toy was only a shell. AI modules give that shell a "heartbeat" - and a heartbeat needs an engine. That engine belongs to whoever builds the module.

The winners will not be pure IP holders, nor pure hardware makers, butteams that can genuinely fuse the inner spirit of an IP character with the technical capability of AI conversation. That asks the IP holder to give up the "I only license" mindset, and the hardware maker to give up the "I only ship" mindset.

Both sides give a little, and together they build an IP that is genuinely "alive". That is the biggest possibility in AI modules plus IP licensing.

Learn more about Nablai LX Series brand customization program

Shenzhen Nablai Intelligent Technology Co., Ltd. — AI module specialists for smart toys

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