Fortnite developed by Epic Games is available in three modes. Save the World follows a premium model, where the game is sold, starting at $14.99- Battle Royale follows a free-to-play model, available for free. Still, gamers can buy things or customize characters with its digital currency (V-Bucks), and Creative Mode. As reported by Variety, Fortnite made $1.8 billion in 2019 and $2.4 billion in 2018.
The gaming industry, part of the entertainment industry, is comprised of three main types of players. From game engines, which help developers build their games. To publishing gaming houses. And gaming consoles. While the prevailing business model for decades has been that of selling the console at cost, and make money on games. Digital games changed the way games are distributed and sold, and it opened up the way to free-to-play models.
PCs: before 2018, the primary storefront for games on PC was Steam run by a company called Valve. In 2018, Epic Games, owner of Fortnite, launched its storefront. From there also Fortnite is distributed on PCs.
Mobile/tablets: Fortnite can also be downloaded through the Apple store on iPhones and iPad and the Google Play Store for other Android devices. Those are the leading digital marketplaces.
Gaming consoles: the main gaming consoles where Fortnite can be distributed there are PlayStation and Xbox. While those consoles enable Fortnite’s downloads, its experience might be limited by the locked-in experience created by gaming consoles.
Breaking down Fortnite modes and revenue models
Depending on the three modes of gaming on Fortnite, there is also a separate revenue model for each mode:
Save the World, premium model: built as a player vs environment game, is structured as a mission-based game. Contrary to the Battle Royal mode, which is the one that enabled Fortnite success, Save the World is available at $14.99.
Battle Royale, free-to-play model: built as a Player versus Player, or PvP, game mode this free-to-play game sparked virality and made Fortnite the success it is today. This game mode enabled up to 100 players, to play in several formats, alone, in duos, squads, and more. The built-in group dynamics, and the fact it was freely available, helped sparkle the Epic Games’ ecosystem.
Creative mode: in the Creative mode, players gain access to a private island, where they can design the whole thing as they want and invite others. This mode is pretty interesting as it enables not only gamers but also creators or aspiring so to build their own gaming environment.
Breaking down how V-Bucks work
The V-Bucks, the currency used on Fortnite (Source: epicgames.com).
V-Bucks are an in-game currency used in Fortnite, which can be used to purchase things like outfits, pickaxes, wraps, emotes and Battle Passes. This is the primary revenue generation strategy of Fortnite.
Opening locked-in gaming console: how the popularity of Fortnite unlocked closed platforms
Fortnite Battle Royale became a cross-platform game. As gaming console companies like Sony, didn’t enable gamers on PS4 to team up to play, Sony. Yet Fortnite’s popularity made those gaming console companies adapt. And finally Fortnite became a cross-platform game, where players from several consoles can team up and play.
That is the power of one of the most popular games of our times.
Key takeaways
Epic Games distributionmodel was shaped over the years and it leveraged on making a part/or gaming mode (like Fortnite’s Battle Royale) for free, to leverage on a separate distribution channel (like PCs) that goes beyond the locked-in logic of gaming consoles, manufactured by two key players (Sony and Microsoft).
The free-to-play gaming mode, where players could also team up, sparked its virality, enabled Fortnite to become a streaming sensation, and in turn build the sort of gaming ecosystem that made it a success.
Epic Games was valued over $17 billion by August 2020, and it comprised three primary revenue streams: Unreal Engine Licensing and Publishing Royalties, Games like Fortnite, with primary a free-to-play model, and its storefront.
Key Highlights
Fortnite Overview:
Fortnite, developed by Epic Games, offers three modes: Save the World (premium), Battle Royale (free-to-play), and Creative Mode.
The game uses its digital currency, V-Bucks, for in-game purchases.
Distribution:
Fortnite is distributed across various platforms:
PCs: Steam and Epic Games Store (owned by Epic Games).
Mobile/Tablets: Apple App Store and Google Play Store.
Gaming Consoles: PlayStation and Xbox.
Revenue Models:
Save the World: This premium mode is sold at $14.99 and is player vs environment (PvE) focused.
Battle Royale: This free-to-play mode with player vs player (PvP) gameplay drove Fortnite’s success.
Creative Mode: Players can design their own gaming environments.
V-Bucks:
V-Bucks are the in-game currency used to purchase cosmetic items, Battle Passes, and more.
V-Bucks serve as the primary revenue generation strategy for Fortnite.
Cross-Platform Play:
Fortnite Battle Royale enabled cross-platform play, allowing players from different consoles to team up.
This was a significant move as it pushed gaming console companies to adapt to changing player preferences.
Epic Games’ Distribution Strategy:
Epic Games crafted its distributionmodel by offering free-to-play modes on multiple platforms to reach a wider audience.
By leveraging free-to-play models and expanding distribution beyond locked-in gaming consoles, Epic Games built a successful ecosystem.
Virality and Success:
Fortnite’s free-to-play Battle Royale mode, which enabled team play, drove its popularity and virality.
The game’s streaming sensation status contributed to its ecosystem’s growth and success.
Epic Games’ Valuation:
As of August 2020, Epic Games was valued at over $17 billion.
The company’s revenue streams included Unreal Engine Licensing, publishing royalties, Fortnite’s free-to-play model, and its own storefront.
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The gaming industry, part of the entertainment industry, is comprised of three main types of players. From game engines, which help developers build their games. To publishing gaming houses. And gaming consoles. While the prevailing business model for decades has been that of selling the console at cost, and make money on games. Digital games changed the way games are distributed and sold, and it opened up the way to free-to-play models.
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Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
