How 'Fortnite' has perfected the freemium gaming model

Buying in-game character skins while playing a free game? Mates trolling you because you have the stock champions? Let me tell you a thing or two about how this 'peer-pressure' from your friends is making the gaming industry rich!

Let me start by explaining what a 'freemium' game application means? Freemium game, or commonly known as 'free-to-play game,' is a gaming application that you can download for free and includes revenue-generating in-app purchases. The word itself is a fusion of the terms 'free' and 'premium.'

Now let's talk about Fortnite! You must have heard about this first-person shooter, which literally enables you to construct brick walls in the game to stop incoming bullets (talk about extra). Props to Epic, for hyping up the game by gathering famous celebs like Drake playing with big online streamers like Ninja (230k active viewers!), or getting indirect publicity through some random kids doing the Fortnite dance in public places.

Last year, Fortnite hosted the 'Fortnite World Cup' to celebrate its second anniversary. Besides, the company gave away millions of dollars in its prize pool, and Kyle Giersdorf, a 16-year old, won the championship and a whopping $3 million prize. In 2018, Fortnite was the game of the year, with 45 million users (across platforms) playing the game and had a run rate of around USD$3 billion (£2.3 billion). Moreover, as per February 2020's earnings, Fortnite was in the top four grossing games on console. So how exactly does this game makes so much money when it is free!?

Fortnite's fortune is based upon the freemium model (as explained before). The game relies on 'microtransactions' for making money, i.e., when the players choose to purchase in-game accessories, dubbed as 'costumes' and 'skins.' You can keep playing Fortnite for free; however, an overwhelming majority of players opt to get these additional items (due to peer pressure), which produces enormous revenue for Epic Games. The game also features a unique system called the 'Battle Pass,' which comes with a quarterly subscription cost of $9.50 or 950 V-bucks (in-game currency).

Moreover, in the free version, only a certain amount of tiers (skins and other content) can be unlocked via completing in-game challenges. Whereas, a player can unlock additional tiers through the battle pass (trust me, your teammates will make you buy one!). Hence, a majority of people buy these seasonal battle passes. It is used to buy skins, dances, and various game modes ranging from 200-2,000 V-Bucks (or $2-$20).

Hence, utilizing this idea of exclusivity through in-game skins, dances, etc., Fortnite has successfully merged the impression of 'better gaming experience' with buying 'exclusive content.' However, you will be surprised to know that today, Fortnite and such freemium games face one of the biggest challenges: the constant need to come up with new content. Therefore, as long as Fortnite continues to be innovative with its content, it will experience success.

You must have noticed that recently on Twitch and Youtube, the viewership for Fortnite's esports events has decreased, which suggests the decline in the popularity of the game. This can be explained by the coming-in of new competitors such as the massively popular game, 'Valorant' from Riot (the skin prices are even worse!), and how it has gathered the younger generation's attention (Fortnite's target segment).

The next time your mates tell you to buy an epic skin or the battle pass, just because the stock character is too lame, tell them how they are funding a money-making giant when they can put the same money to better use!

For the secret gamers, who need all the extra knowledge with a quirky delivery, watch this:

---

Last Update

• Updated on 25 Aug, 2020 (Updated the usage rights for images and GIFS, and updated some of the content in a more personalized style)

Additional Sources

• All images are sourced from Google and are under the license of 'labeled for reuse'

• All gifs are embedded from GIFY and belong to the parent company's official accounts