Fortnite Skins Impacting Revenue for Other Console Games
The popular game Fortnite is not only dominating the gaming industry with its colorful and fun skins, but it’s also impacting the revenue of other console games. According to marketing intelligence company SuperData, the high sales of Fortnite skins and cosmetics have contributed to a six percent drop in combined revenue from microtransactions and in-game content sales of other games worldwide.
SuperData’s analysis shows a significant increase of 49 percent in revenue from in-game sales on consoles when comparing the second quarters of 2017 and 2018. Even industry giants such as Activision Blizzard and EA Games reported that Fortnite attracted more players to their games, resulting in improved sales figures.
However, when excluding Fortnite from this analysis, there is a clear six percent revenue drop for the industry as a whole. This drop includes top titles like Blizzard’s Overwatch and EA’s FIFA 19 and Madden NFL 19.
SuperData believes that this drop is not a coincidence and suggests that Fortnite players are choosing to spend money on cosmetics and the seasonal Battle Pass instead of other console games. They refer to this relationship as “material cannibalization across top incumbent franchises.”
In addition to impacting revenue, Fortnite is also cannibalizing online viewership. SuperData’s data reveals that Fortnite’s audience on streaming services like Twitch has increased by 59 percent in the last three months, while viewership for Overwatch, League of Legends, and CS:GO has decreased significantly.
This shift in preference could be attributed to Fortnite’s unique business model, which offers the Battle Pass system that gradually unlocks new cosmetics for players. In contrast, other console games rely on loot boxes, which can be frustrating for players as they provide random items.
The impact of Fortnite on other gaming companies will become evident in their future earning reports. It remains to be seen whether Fortnite will continue to benefit these companies or if they will need to adapt to compete in the battle royale genre.