IP is an abbreviation that actually stands for a surprising amount of things (talk about two letters being really popular). In the world of video games, though, IP often stands for Intellectual Property, and you’ll often only hear it when a developer or publisher is talking about a brand new original game. It’s basically just a legal way of saying here’s a game that we made that nobody else can make, because we made it first.
The term is used because it protects artistic works such as books, literature, inventions, designs, symbols, and games. Intellectual Property Rights (IPRs) protect IPs from being stolen. It’s why copycats often have to go to court, and why every single platform doesn’t have a Super Mario game.
To wrap this up and put it simply for you, the term IP just protects the games you love. That’s it.
One other place you may see IP used in video games is in the highly popular MOBA League of Legends. One of the currencies in that game is called Influence Points and is earned by playing the game. You can use these to unlock Runes, Runebook Pages, or Champions in the game.