Fortnite, developed by Epic Games, has had a profound economic impact on the modern gaming industry, disrupting traditional revenue models and breaking many records. As the most popular ‘battle-royale’ game, which is a last person standing multiplayer competition, Fortnite has achieved immense success. In 2019, Epic Games generated $3.7 billion and $5.5 billion in 2022 despite the most popular platform only being released in September 2017. What truly makes these numbers astonishing is that Fortnite Battle Royale is free-to-play, meaning that it relies entirely on in game purchases. This strategy has proven to be highly effective making players convert real money into ‘V-Bucks’, the in-game currency. Players spend this currency on cosmetic items including skins, dances, and other items that do not actually affect game play. So how does Fortnite maintain such a devoted fan base?

Free to Play

Fortnite has successfully implemented a free-to-play system in their game, but although the game is free-to-play, it has still generated over $20 billion in lifetime revenue as of 2023. The introduction of Battle passes, limited-time skins, and exclusive items have driven many players to invest in these virtual items, in hope that they will eventually become ‘rare’. Fortnite has a huge fan base of 650 million registered players and of these, 126 million played once a month in 2023, with over 60% between the ages 18 and 24. The marketing strategies, including collaborations with celebrities, such as musicians Travis Scott and Ariana Grande, and the creation of an active Fortnite community, have resonated well with younger people, compelling them to spend money on the game.

eSports

Fortnite has not only revolutionised the gaming industry, but also completely transformed the world of esports, raking in an immense amounts of viewers on streaming platforms, such as Twitch, with popular streamers like Ninja, at the time, having over 6 figures of viewers often. The game’s all-time Twitch viewer record stands at 712,682 peak viewers on June 13,2018. Just before this, Erin Wayne, a community manager at Twitch, pointed out that Twitch Prime’s social media grew by around 70% since Fortnite became a thing. Twitch Prime is a collaboration between twitch and Amazon, meaning that users with Prime can access exclusive content, in this case it was a Fortnite skin. This success has created a platform for a strong streaming community, amassing sizeable fan bases that continue to push the game’s popularity.

Epic Games has made a substantial investment in the eSports scene by hosting many competitions where cash prizes can be won, including the Fortnite World Cup, which carried a $30 million prize pool. The event, which took place in 2019, reeled in 2.3 million viewers on Twitch and YouTube, with 40 million people attempting to qualify for the finals. Whole these events may not necessarily make profit directly, they significantly heighten player engagement and exposure, leading to increased in-game transactions and partnerships.

Creator fund

Fortnite separate itself from many games with its heavy emphasis on its creators/streamers. With the introduction of the ‘Creator Economy 2.0’ by Epic Games, 40% of the game’s net revenues go to creators each month. This is a significant increase from the previous ‘Support-A-Creator’ system, where creators only received 5% of purchases made when people bought items using their codes, and you could apply for this if you had over 1000 followers on social media. The new system allows creators to earn based on the engagement and experiences they build for Fortnite, providing them a direct source of revenue. This not only benefits these creators but also further incentivises people to play and stream the game.

Controversies

Despite the success, Fortnite’s economic model has faced several criticisms and controversies, particularly related to its in-app purchase system and legal disputes. One of the most notable of these was the legal battle between Epic Games and Apple, which began when Epic Games filed an antitrust lawsuit in 2020. This accused of Apple of acting as an illegal monopolist by requiring consumers to get apps through its App Store and buy digital content inside an app using its own system. Apple charges up to a 30% commission for in-app purchases. Fortnite was therefore removed from the App Store, and Apple also counter-sued for breach of contract. The legal dispute shed light on the substantial revenue generated by Fortnite on the App Store, with the game making $1.2 billion in lifetime mobile revenue before being banned. 

Additionally, in March 2023, Epic Games agreed to pay $245 million to settle FTC allegations related to in-game purchases. According to the FTC, the company charged parents and gamers of all ages for unwanted items and locked the accounts of customers who disputed wrongful charges with their credit card companies. 

In response to these controversies, Fortnite has made efforts to balance the need for revenue with maintaining a positive player experience. The game has implemented various strategies to ensure that in-app purchases are purely cosmetic and do not impact gameplay, aligning with gamers’ preferences for fair competition. Fortnite’s legal disputes with Apple and the backlash over unlawful purchases have highlighted the complexities of maintaining a profitable economic model while also addressing concerns related to fair competition and consumer protection. 

Overall, Fortnite’s strategic marketing and commitment to its community have propelled it to great financial success, setting the standards for how lucrative free-to-play models can be. As technology continues to advance and the worlds of eSports and streaming continue to grow, the game has the potential to continue setting the new standards for the gaming industry.