Fortnite: Battle Royale’s Billion Dollar Success
Fortnite: Battle Royale has taken the world by storm, generating a steady stream of revenue for creator Epic Games.
Since its launch, Fortnite has earned $1 billion in in-game revenue, according to a report from SuperData Research. This translates to around 100 billion V-Bucks, the game’s in-game currency, spent on in-game content. To put it into perspective, this is equivalent to 50 million Fortnite players purchasing the Raven skin just once, which costs 2,000 V-Bucks.
What sets Fortnite apart is the willingness of players to spend money on a game that is available for free. This is a significant departure from the traditional model, where players were often opposed to microtransactions. To understand why this happened, it’s important to analyze the challenges faced by Epic Games in a genre that typically rejects freemium microtransactions.
Solving the Woes of the Genre
Here’s a fun fact: if you play Fortnite but haven’t spent any money in the game yet, you’re in the minority.
A study of 1,000 Fortnite players revealed that nearly 69% of them spent money in the game, with an average expenditure of $84.67 per person, according to a report by Forbes. Skins accounted for 58.9% of purchases, and 79.5% of players admitted to purchasing a $10 Battle Pass for one of the game’s seasons. Interestingly, 36.7% of players revealed that Fortnite was the first game in which they had ever made a microtransaction.
This trend of players willingly spending money on in-game purchases is a significant departure from the past. A study conducted in 2015 found that free-to-play shooters consistently earned less revenue compared to MOBAs and MMORPGs. In 2015, free-to-play shooters only made $237 million, while MOBAs and MMORPGs brought in $501 million and $499 million respectively.
Even today, the free-to-play model for shooters continues to struggle with monetization. Games like Paladins: Champions of the Realm and Warframe have faced challenges in implementing microtransactions effectively. However, Fortnite’s success stands out, earning significantly more revenue than its counterparts.
Even when developers release their conversion rates, they don’t come close to the high numbers achieved by Fortnite. When Team Fortress 2 transitioned into a free-to-play game, it had a remarkable 20 to 30% conversion rate for microtransactions, significantly higher than the 2 to 3% conversion rates for similar games.
Gabe Newell from Valve expressed his surprise, stating, “We don’t understand what’s going on. All we know is we’re going to keep running these experiments to try and understand better what it is that our customers are telling us.”
Spending Money Isn’t a Chore in Fortnite
It’s ironic that a game like Fortnite, which belongs to a genre that typically earns less revenue, has become a worldwide sensation. However, what sets Fortnite apart isn’t just its microtransactions; it’s how Epic Games has structured its skins and cosmetics to create a strong incentive for players to spend money from the start.
Unlike other games that heavily rely on loot boxes, Fortnite offers tiered microtransactions. The most elite outfit skins are obtained by ranking up your Battle Pass, which requires playing a lot of Fortnite. This trade-off allows players to showcase their skill and carry exclusive skins that others can only dream of owning, such as the Omega or The Reaper skins.
Fortnite’s cosmetics are exclusive items that hold symbolic value to both the owner and other players. They convey skill, wealth, rarity, or dedication to the game. In a way, Fortnite’s cosmetics are more like Xbox Achievements and PlayStation Trophies, reflecting players’ achievements and interests rather than simply being free-to-play microtransactions. This is what makes Fortnite so profitable.
Is Fortnite’s Model the Future?
While Fortnite has found success in making microtransactions appealing to players, it’s important to note that each game is unique. Retail games, like those from Blizzard, have different expectations and revenue sources. Blizzard’s microtransaction systems across its games earned $7.16 billion in revenue in 2019.
Fortnite’s monetization model may not work for every game. Different genres and player expectations will dictate how much players are willing to spend on cosmetics or additional content.
However, Fortnite has successfully overcome the challenges faced by other freemium shooters. It’s not just about owning a cosmetic; it’s about the meaning and symbolism behind those cosmetics. The appeal of Fortnite’s skins lies in the sense of achievement, rarity, and recognition they provide to both the owner and the wider Fortnite community.