Why Fortnite Earns So Much Money

Unless you have been living under a rock for the majority of this year, you have heard about the video game that has taken the world by storm, Fortnite. For those of you who are still unclear as to what it is, the premise of the game is to be the last one alive among 100 players. To do that, you must build and shoot opponents while also outrunning a constantly shrinking storm circle that makes the play area smaller and smaller until a victor is found.

While this concept of a Hunger Games type game is nothing new, Epic Games, the developer, has been able to transform it into a nearly unlimited source of revenue. In fact, in the month of May 2018 alone, this free-to-play battle royale shooter made a record $318 million. And yes, you read that correctly. This game is absolutely FREE. Now you may be thinking, how does a free-to-play game like this generate so much money? As an avid player of the game and member of the community around it, I have determined fourreasons why Fortnite is basically printing money. These four reasons being: currency dissociation, item shop scarcity, cosmetic systems, and overall aesthetic. Let me explain.

Dissociation From Real World Currency

In the video game industry today, a business model that has become commonplace among developers is a little thing called micro-transactions. This are ways players can purchase virtual items or currency to use in the game that they are playing. Some examples of these purchases can include extra lives, new characters, more levels, and much more. In terms of Fortnite, these micro-transactions take the form of cosmetic upgrades to your in-game character. Cosmetics, as I will refer to them from now on, are items you can purchase that only affect how they game looks and have no impact on your performance in the game. However, in Fortnite, you cannot just purchase these cosmetics with US dollars or any real-world currency. First, you have to convert it into their custom in-game currency, V-Bucks.

This may seem to bit annoying to some, however, this transition into a fake currency creates a very interesting psychological change in possible customers. This kind of change was researched at Cornell University in 2009. One of the hypotheses tested by the researchers was that, “Menus that present prices with a “$” symbol will yield lower consumer spending than those that do not.” After testing this hypothesis they found that “a significant reduction in spending [occurred] when formats with monetary cues such as the word ''dollars" or the symbol ''$" were used.” Now you may be saying wait, how does menu pricing design relate to Fortnite’s item shop? Well, when looking at the item shop in-game you will see no representation of a “$” symbol or any monetary reference. All the items for sale are displayed in their “V-Bucks” value that is not only void of a “$” symbol, but also at different value than its real-life worth. For example, one US dollar is equivalent to 100 V-Bucks. So a cosmetic skin shown to be 2,000 V-Bucks is actually 20 US dollars. This manipulation in the perceived cost of an item is what I find to be very smart on Fortnite’s end.

While the in-game currency concept is nothing new to the video game industry, with the scale Fortnite is at, plus the other factors that I will discuss shortly, this effect in consumer spending is amplified. I will note that while not in the item shop, the “$” symbol does appear in the V-Bucks shop screen. However, being in a separate menu tab and paired with bonus V-Bucks for higher purchases, this doesn’t take too much away from the effect given by the item shop.

Daily Item Shop Scarcity

A major part of Fortnite’s cosmetic side, especially the Battle Royale portion of the game, is the daily item shop. Typically, in my experiences with video game cosmetics, the items are always available, in some regard. They may be hidden behind walls of chance, such as loot boxes, or behind requirements for challenges, but they are technically always there. However, in Fortnite, there is a very high chance that if you do not purchase a cosmetic item in the shop during it’s 24 hour duration, it may never be available to you again. A good example of how this can happen is with arguably the most desired and sought after cosmetic skin in the game of Fortnite, the Skull Trooper. Shown below, this was one of the first cosmetics ever created in Fortnite for a Halloween event back in October of 2017. At that time, Fortnite was still in its infancy so not many people were playing it, let alone making purchases in it. In fact the last time it was available in the item shop was November 28th, 2017. With that being said, accounts that have bought this skin for 1,200 V-Bucks, or $12, are being sold for upwards of $100 on sites like Ebay. While this is definitely against the EULA, or End User Licensing Agreement, it still does happen.

While the extreme is with the Skull Trooper, this feeling of never seeing a certain cosmetic item again is present in every item in the shop. This forces players to sway towards purchasing an item because if they don’t at that very moment, they may never get the chance to again.

Battle Pass System

A very important part of any online multiplayer game is that it has players to play it. This can also be called engagement. Multiplayer games need engagement to survive. So if players of your game have nothing to progress towards or achieve while they are playing, they are going to stop. This, in turn, dilutes your player pool, leaving existing players with longer match finding times or just nobody to play with in general. While this problem ends probably hundreds of multiplayer games every year, I don’t see Fortnite Battle Royale succumbing to it anytime soon. That is because of Epic Games’ secret weapon, the Season Battle Pass.

Spanning the course of an in-game season, or about 60 days, the Battle Pass in Fortnite is a way to unlock exclusive cosmetics as you level up throughout the game. For the price of 950 V-Bucks, or $9.50, players can unlock over 25,000 V-Bucks, or $25, worth of cosmetics. This includes skins, gliders, pickaxes, emotes, experience boosts, and even V-Bucks. The value you receive from the cosmetics is great on it’s own, however, what makes the Battle Pass so great is that you can earn back the V-Bucks that you spent to buy it initially. This, in turn, gives players the opportunity to “purchase” the next battle pass without spending any more real-world currency and still have V-Bucks left over. While this is fantastic for players adamant on not spending more than around $10 on the game, the ability to earn V-Bucks through leveling up creates a sort of gateway to purchasing cosmetics from the item shop.

For example, say you decide to buy the Battle Pass and utilize the leveling rewards you get from it. After a few days, you get to the point where you have earned 300 V-Bucks through leveling up. With you new found V-Bucks you decide to look at the daily item shop and see a character emote, normally a dance of some kind, for 200 V-Bucks. Since you have enough, you decide to buy it. Fast forward to the next day and there is another emote costing 200 V-Bucks that sparks your interest. Unfortunately, you no longer have enough V-Bucks to make the purchase, which leaves you with two options: leveling up more, which will take another day or two of playing, or purchasing V-Bucks, which will let you get the emote instantly. As I mentioned earlier, that emote has a chance of never coming back after it’s 24 hour duration in the shop so if you take the time to level up, you may miss your only opportunity. I believe this type of situation is what tips players over the edge in terms of their spending in Fortnite. By providing players with a small amount of V-Bucks, the Battle Pass is giving you a small taste of what you could be getting if you go ahead and just buy V-Bucks. I really believe that this “strongly suggesting to buy” dilemma creates a large impact on players’ spending decisions on cosmetic items. Don’t take my word for it though. Take a look at the $50 million Epic Games earned when players purchases five million Battle Passes on the first day of Season 3 alone.

Cartoon Style Over Realism

Aside from the micro-transactions involved with Fortnite, another big aspect that I believe aids Epic Games in making so much money is the overall aesthetic of the game. When compared to its competitors, Fortnite is by far the most “child-friendly.” For example, in other popular battle royale games like PlayerUnknown’s Battlegrounds and H1Z1, you kill other players in life-like environments with guns that you can decorate to your liking. In Fortnite Battle Royale, you eliminate other players in cartoonish environments with generic, simple weapons. Notice the key differences between those last two sentences. There is no such thing as kills or death in Fornite, there are only “eliminations.” In addition to the wording, there is also no real portrayal of death visually. When being eliminated in Fortnite, you character is retrieved by a drone in a fashion that suggests your character is just a hologram of some kind. To distance itself even further from death and killing, Fortnite also includes a host of wacky cosmetic skins. These include the likes of Tomatohead, Crackshot, Beef Boss, and Aerobic Assassin, just to name a few.

Crackshot

Beef Boss

Tomato Head

Aerobic Assassin

This “child-friendly” appeal opens up a whole other player base that games like PlayerUnknown’s Battlegrounds and H1Z1 can struggle with retaining. For example, if you see your young child playing a game that is quite gory and nearly realistic, you are probably going to question whether or not you should be letting them play that game. However, if you see your young child playing a game where he or she is dressed as a pink bunny flying around on a glider made of a shark with a laser, you’re most likely going to let them continue.

Conclusion

Overall, Epic Games is doing a lot of things right. They are taking advantage of currency dissociation with their in-game currency, V-Bucks, deploying scarcity with their cosmetics to create a need to buy right away, using a cosmetic leveling system that acts as a gateway to purchasing additional V-Bucks, and sticking with cartoonish charm that opens them up to a larger player base. By having such characteristics, I don’t see Fortnite’s revenue declining any time soon. Just look at the cool $318 million they made in the month of May. They are sitting at the top of the industry in prime position to both guide the multiplayer video games in a different direction and make so much more revenue while doing it. All I can say is keep your eyes on Epic Games, because they will be the ones leading the next era of video games.

#fornite