Thursday, May 3, 2018

The Economics of Fortnite

The Economics of Fortnite
Damon Bates

Almost everyone has played and or has heard of the FTP(Free To Play) powerhouse, Fortnite. It's a game that has taken over the gaming world by storm and has no plans of stopping. The thing that makes Fortnite special over other games is not its premise but how in a culture dominated by $60 games Fortnite is completely free and is on almost every mainstream console to date. Well how does Fortnite makes its money and how much are they making?

The success Fortnite is seeing is quite comparable to the success of free games like Candy Crush and Pokemon, who make their money from ads and in-game transactions rather than a upfront base cost. This opens up a much larger for revenue for companies and Fortnite knows exactly how to play this system. They use a chip system similar to casinos where instead of using money your using chips which is really money but you are less cautious with your “chips” then you are with your physical money. V-Bucks or their system of chips can be bought at prices from $10.00, $24.99, $59.99 or $99.99. Each amount gets you a certain amount of chips you can use to buy cosmetics and emotes and cool stuff to show off in game

Skins which are most popular among players cost between $10-$20 in real money. All of this is optional but they purposely make basic skins and emotes bland and not flashy or eye-catching so that people will buy these skins or emotes to spice up their game or show off. If they have each player just buy 3 skins they can make the same as selling a game at full price and people don't realize this because they are spending V-Bucks instead of real money.

You can see this apparently become true when you see Fortnite in February grossed $126 million and surpassed their competition PUBG who made $110 million selling their game for $35. Aswell Fortnite’s system is outperforming mobile super powers like Candy Crush and Clash of Clans.


With the success of Fortnite microtransactions you can bet too see games to start following in their footsteps. I mean who wouldn’t because if it is done right then games have chances of making millions more and making fans even happier.


31 comments:

  1. Fortnite plays their money well. At first, they really were just an early access game. But once people started to get hooked on it, they added micro transactions so that they could cash in on their large player base. The Battle Pass is another way Fortnite persuades you into spending money. It's a lot more affordable than items in the shop, but it also gives players a reason to play. Players don't want to buy all their gear, they want to earn some of it. Making the battle pass cheap is a power move for Fortnite, as they know almost every player will purchase the battle pass. And if you have the battle pass, you'll want to play more to earn battle stars to level up your battle pass.

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  2. I agree that video games in fake cash bring more money because you have trouble understanding what the real cost of one chip or thing is. Like with other games it makes it look bigger or smaller.

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    1. Shawn makes a good point, video games can make a lot of profit through exchanging real money for in game currency as the transfer rate is difficult to determine, this could cause someone to repeatedly purchase in game spending money and create very high profits for game creates. It is also important to note that these games are addictive and socially based allowing kids to play with there friends from around the world. That is why people are willing to spend money on the in game appearance of their avatar

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  3. I agree that fortnight is ingenious. They don’t force players to buy anything and they make it available to everybody, but the people who are willing to spend money will. I know plenty of people who are just fine playing the game without spending anything and that should be available to them. But then there are also people who are willing to spend a lot of money just to try and look cool to play the game. Fortnite has been a huge success and as long as they continue to keep it interesting and change things up so that people don’t get bored, it will continue to do well, although I’d imagine people are going to get bored in the upcoming year or two.

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  4. In a year, Fortnite has brought in so much money. It's clear that players support the micro transaction based game because they have the option to spend no money, but also because buying these add-ons don't affect the actual game play, so you don't have to spend money to be better. The addition of a large adult fan base is also a key player to sales because these consumers have easier access to "spending money" than kids who don't have a constant revenue.

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  5. Micro-transactions are what ruin a video game, in a game like Fortnite it appeals to little kids who will beg their parents for that "New Skin that they totally need otherwise they aren't going to be good at the game." Games like this and Call of Duty now are just examples of how when you give people "Bland" items they have to show off so they will buy in game currency just to get the best stuff when in all reality it doesn't do anything for them. I believe anyone that wastes large amounts of money of games like this is stupid.

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  6. I find it interesting that people are more likely to spend V-bucks then really money. Even tho it is online and and it is not really money, don’t you have to buy the V-bucks with real money? So in a way the owners of fortnite are kind of tricking people. They make the basic skins and dances simple or dumb and then you have to pay V-bucks to get the “cool” ones. Clearly this is working. People continue to spend more and more on this game. Even tho what they are buying doesn't make them any better at the game, the only thing it does it make that player look better or cooler. Even if some people refuse to purchases V-bucks and don’t buy the fancy skins there are others out there that will offset them and buy multiple skin and/or dances. This will cause Fornite to profit.

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  7. Fortnite has become so popular over the past few months, its odd because the game is very old actually and the only reason it is getting so much attention is because it is advertised as free for Xbox live users. Fortnite was not making money in the past because their graphics were poor and that makes people retreat to using games that you actually pay money to play because of the high quality of it. People do not realize how much they are spending in time or money on this game, after all it is a game but what makes it so special is how competitive people can get with it. The competition make people want the cool items that cost more just so they feel like they can play better than others. It is quite sad to think that this game is so popular it is consuming peoples live but in a few months to a year this game will have little to no attention like most other popular games such as Pokemon as you mentioned above.

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  8. It's a cool concept where they don't charge you anything for the actual game. They get money from the players in another way which seems well thought out and makes you think that you're spending less money then you actually are. They are using this for a big growth in income, but I feel like they might lose some players if something better comes out.

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  9. Damon: You are very right about Fortnite. It has taken the world by storm. Like you said this game is totally free to play without all of the unique features. Like many popular games such as Madden, 2K and COD they have a baseline price of 60 dollars before you even play the game. That's not even taking into account all of the packs and stuff that you can buy to go along with the game. In fortnite since it is free people think they can and want to buy all of these unique packs and features to keep up with other people. THis is a huge seller and is a very big reason as to why fortnite brings in to much money. Fortnite is also a game that really all ages play. So since the age range is so expansive that also helps to bring in a lot of money for the game. Like you said not only is fortnite performing and bringing in a lot of money it is also out selling a lot of games. Due to the popularity of the game and the mass amount of famous people that publicly play the game the revenue will continue to rise and rise.

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  10. Personally I hate Fortnite, and I hate their success, but economically they are killing it. It would make sense that they have made more because of how they use their own in game currency, but it also helps when people don’t realize how much they are truly spending. One thing I would question though is the game is still in beta or it’s out as a prerelease, so when the full game is finished, are they going to put the standard $60 on the game? Or is it going to continue to be a free to play game. This is a big question for the company because the game has gained so much traction and has one of the biggest fan bases in gaming, so I would assume that by putting a price on it, no matter what most, if not everyone who can would make that purchase in a heartbeat. The Fortnite would be making tons of money.

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  11. It is interesting to see them bring in so much money since you do not have to spend money to actually play this game. Like Klaus said, they play their money well. I believe that some people spend the money so that it doesn't get boring and then more people will want to play the way they do with the "extra stuff". I agree the revenue will continue to rise but eventually a new game will come out that will beat fortnite. Right now, I believe fortnite is just a face...

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  12. This is a very relevant topic because almost every guy I know is obsessed with Fortnite. For example, my brother is downstairs playing that game all the time with his friends. Yes the game seems fun and all but one of the main reasons it is so appealing is because it is free, until you want to buy accessories and what not. Buy making the game free but putting a price on add-ons that is tricking the buyer to think that they are getting more bang for their buck when in reality they will eventually pay enough where it evens out.

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  13. The way Fortnite markets their game is very unique as they advertise it to the public as a free to play game, which makes everyone accessible to playing the game. But once you start to play it more and more you see the popular players with the cool Skins and cosmetics in the game, so you try to replicate them. With such a large amount of their player base coming from young kids and teens, they have no sense on what they are spending their money on. This is why they bring in so much revenue from cosmetics and things like that.

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  14. I agree that Fortnite is using a good strategy with it's FTP (free to play) set-up. I have spoken to various fortnite players and most have said that they play fortnite because it is free to play and it is only $10 to buy a seasonal battle pass (which is very much worth it in my opinion). As long as fortnite stays true to their philosophy that it is not a "pay to win" game then their success will only look up from here.

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  15. Fortnite is able to make such a large profit because their game is unlike many others out there... it’s free. And because so many people are playing the game and becoming basically addicted, it gives the game company a lot of leverage and power. If the game were not to be free, I feel that Fortnite would have still become popular but not profited as much because people would be paying for both the initial cost of the game and upgrades within the game as well.

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  16. It's very interesting that the game is free, but a smart move so the game will spread more quickly to anyone with a computer accessible to them. And that the creators have made it so players can continue to play for free unless they want to buy extra accessories, that way as the money comes out in smaller increments many will not even notice the spending and continue to buy.

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  17. Once Fortnite began to become a big deal, the creators jumped as quickly as they could to figure out ways to make the most profit while the hype was in full swing. Now that they are allowing people to purchase battle pass tiers instead of earning them, the amount of V-bucks bought and spent sky rocketed. People desire the tier 100 challenges and wanted them the moment season 4 was released, which was the cause for the large increase of money spent on the game. Not to mention that in order to get any skins, most emotes and v-bucks, you have to purchase the battle pass which costs $9.99.

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  18. Fortnite is an amazing simplistic game with creative cartoonish scenery that really makes it a really enjoyable experiance for millions. I believe that this was a very well made game and the reason so many people are playing it is becaue of the fact that it is free and pretty much everyone with a next gen gaming console has it even if they aren't playing it. Also fortnite is a great was to interact with your friends besides just going outside. It can get intense when you're rushing to the circle or last ten alive that's where Fortnite really shines.

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  19. Fortnite is the game that is truly doing it right. I could see why people would enjoy this game. Another reason people may like this game that not many think about is how involved they are with their community. They really listen to their fans and provide what they want, whether is cosmetics or even bug fixes.

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  20. Fortnites appealing free-to-play gaming strategy is helping it out in the long run. I think that the media is also having a huge role in the advertisement of this game, and helps get more people interested and download it. Free gaming appeals to everyone, even if there are add ons or deluxe packages that come with it. As long as the base game is free, the numbers for sales and usages will continue to increase.

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  21. By making the game free, it definitely applies to the consumers’ expectations and tastes because the majority of gamers wouldn’t want to play the game if they had to spend a lot of money to access it. Because of the quality of the gameplay, many of the players will buy in-game items to improve their experience. Since the game is so popular, easy to access, and enjoyable to play, they will gain a massive amount revenue. Another way to generate a lot of revenue is producing game merchandise. Gamers love to personally own video game merchandise, therefore they are willing to pay the high prices for the merchandise. As long as the game is popular, they can continue to increase the supply in demand because the more merchandise people purchase, the higher their prices will be.

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  22. The Fortnite craze is also endorsed by other determinants for example popular rapper, Drake is known to play the game. This increases the overall demand for Fortnite because if someone famous thinks it’s cool ideology. However, most companies, and fads can go out of style like fidget spinners which went from neat to lame in a span of a few months. But, this can be hasten if there’s a change in consumer tastes especially Drakes. Concluding its not going to be easy to maintain business if the Fortnite team doesn’t be wary of decisions.

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  23. The economy of video games is an interesting one because there is rarely a correlation between cost of the item and the quality, as there is in many other industries. In this case, Fortnite has created a great product that is completely free to use, and has thus found a way to carve out a large part of the industry. The thing I have always said is that in the long run, these types of games usually become pay to win, even if they are not pay to play. This was true of the Madden franchises extremely popular Ultimate Team mode, which loss popularity as people realized that not only did the have to spend 60 dollars to play, but had to put another 80-100 dollars to compete. I hope that Fortnite learns from these mistakes and allow the game to stay free, and thus stay popular among the masses.

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  24. I've heard a lot of negative comments about micro transactions so I think that it's interesting to hear someone's take on it in a more positive light. I thought that micro transactions were all together bad but now that I hear it in this perspective that it actually allows amateur players to get in on the fun and play for free while players that are obsessed can fun the progress of the game and the developer by putting their money into the game for cosmetic reasons.

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  25. I personally love the way fortnite has played this huge surge of popularity. They made a fantastic game and gave it to people for free causing the extremely quick rise from being unheard of to being one of the largest social influences of our generation. The great part about what they do is all their micro transactions are very successful but also just for fun. By this I mean people can't buy their way into being better all the purchases give you are show. This causes the people like myself who don't want to play to still be influenced by the game and not turned away by it while also creating high demand for the fun products the release on micro transactions. I hope they continue in this fashion because I am a huge fan of it.

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  26. I do like the connections between Fortnite and other games such as PUBG but I feel like the game is slowing down rather fast. When I first started to play the game in October it was a load of fun and I put way too many hours into it looking for the victory royale. Now I find myself almost annoyed with the game because of all the changes the creators have been making. Almost every week there is a new update for the game with new weapons or abilities that I feel are just unnecessary. This in itself has drew me and many others away from the game and soon enough it will be just as common as any other.

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  27. It may seem frivolous to talk about a video game of all things, but with the growth of the digital age and the internet in general, online games like this can generate insane amounts of revenue for relatively little effort, and this type of game sets a precedent for the growth of online markets, and a transition from traditional media.

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  28. Nice post! This is a very nice blog that I will definitively come back to more times this year! Thanks for informative post. buy fortnite costumes

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