Epic Games and the pursuit of new monetization models
Epic Games’ cross-platform title Fortnite operates with a free-to-play (F2P) business model and generates income through the purchase of digital currency V-bucks and seasonal battle passes. A battle pass can either be offered for free or purchase and rewards the player with in-game items for completing challenges and playing the game over a set amount of time. Fortnite’s gaming content is loosely structured into seasons. Each season brings new gameplay elements, exclusive cosmetic objects, and changes to the in-game map.The constant stream of new gaming content and updates marks Fortnite as a live game. Live gaming services are becoming increasingly popular, as games as a service (GaaS) are monetized over a longer time than games which only generate a one-time purchase. User engagement with Fortnite still remains strong after the game’s original release in 2017, and in-game live events draw millions of concurrent players. In addition, Fortnite constantly ranks as one of the most popular games on video streaming platform Twitch, highlighting the game’s earning potential for streamers and eSports players.
Epic Games Store upsetting the industry standard
The Epic Games Store (EGS) was launched in December 2018. It is a direct competitor to Valve’s Steam store and GOG.com, which is operated by CD Projekt.In 2020, PC gamers spent approximately 700 million U.S. dollars on gaming content in the Epic Games Store. The EGS also regularly offer free games to users – last year, users claimed 749 million free games worth 2.4 billion U.S. dollars from the digital platform.
One of the biggest headlines regarding the launch of Epic’s own digital storefront was the company’s approach to developer / store revenue split. Gaming stores and app platforms including Valve’s Steam, the Apple App Store, or Google Play, usually take a 30 percent commission cut from game sales and in-game revenues. The Epic Games Store was released with the announcement that the EGS would only claim 12 percent of revenue, leaving 88 percent to the developers. This approach, as well as Epic’s attempt to circumvent Apple’s monetization strategies in the iOS app of Fortnite, has made many headlines, led to Apple removing the app from its App Store, and resulted in the still ongoing lawsuit Epic vs. Apple. Currently, the Fortnite gaming app is not available on the Apple App Store or on Google Play. However, players can install the game via direct download from the Epic website or Samsung Galaxy Store.
