Fortnite phenomenon turns epic game developer into billionaire
TIM SWEENEY made Fortnite a phenomenon by doing something that sounds crazy: He gave it away.
That strategy has made him a billionaire.
In an industry chock- a-block with monster hits, such as Candy Crush and Pokemon Go, Fortnite’s popularity isn’t surprising. Its revenues are. Between the release of the current version in September and the end of May, Fortnite brought in more than US$ 1.2 billion, according to SuperData Research. As of early June, it has been played by 125 million people.
Fortnite is a global phenomenon, played obsessively by children, rappers, professional athletes and middle- age accountants. It’s a cartoonish, last- character- standing, fighttodeath battle royale where players thrash one another in a struggle for weapons, resources and survival on a shrinking, storm-ravaged island.
Instead of shelling out upwards of US$ 40 for the game, players buy online V-bucks, a virtual currency they can exchange during play for outfits, called skins, celebratory dances or special missions that can cost as much as US$ 20 each.
“On the revenue side, they’ve done something that’s really unique, which is come up with a perception of exclusivity,” said Michael Pachter, an analyst at Wedbush Securities. Many accessories in the Fortnite shop are available on a limited basis, prompting players to buy before coveted items disappear from virtual shelves. “If you see another player in a leopard skin and go to the store and see it’s no longer available, you think, ‘Shoot, I’ve got to move on it next time.’”
All that commerce translates into some of the highest rates of revenue-per-user in the industry and operating margins north of 50 per cent, according to analysts.
“Epic’s valuation has exploded alongside Fortnite’s success,” said Timothy O’Shea, who covers gaming at Jefferies Financial Group. — Bloomberg