You’ve probably seen or heard about this game somewhere before. Fortnite is one of the most popular games worldwide, with more than 40 million players in 2018. In March 2018, Epic Games, the developer of Fortnite, announced a revenue of $223 million across all platforms.1 Fortnite owes its incredible popularity to Epic Games’ decision to launch it as a free-to-play game, which is no new concept in the videogame industry. Developers hope to achieve a great number of players by launching their games for free, and subsequently provide its players with the possibility to make in-game purchases. Even though one might think this model is foolish, it has proven to be successful numerous times (e.g. League of Legends, Clash of Clans). These games rely on a vast amount of players to make the game enjoyable, and to limit waiting times. The ‘freemium’ model is also commonly used outside of the gaming industry, as for example by Spotify and MailChimp.
Needless to say, Epic Games has optimized its digital business model by providing great content and customer experiences through an outstanding platform.2 Now, after conquering the videogame industry, Epic Games added a new feature to its business model, and has taken on a new challenge. It is waging a war against Google’s Android empire. It is doing so by not making Fortnite’s mobile version available for download on Google Play Store, but only on Epic’s own website. A blog by Epic Games states that 23 million people had registered on an Android phone only three weeks after the launch of Fortnite’s mobile version. According to Sensor Tower, a marketing intelligence company, this has caused Google to miss out on at least $50 million this year!3
The success of this move has paved the way for other app developers to sell their apps to the customer directly, not having to relinquish revenue to Google. Digital business models are being altered as we speak. Epic’s attack shouldn’t be taken lightly, as it may completely change the contemporary app industry, which is controlled by giants.
One could say this move is similar to the Barbarian invasion of the Roman empire, and we might be witnessing the fall of another empire.
Do you think Google can fight back?
Sources:
1) https://nl.wikipedia.org/wiki/Fortnite
2) Weill, P., & Woerner, S. L. (2013). Optimizing your digital business model. MIT Sloan Management Review, 54(3), 71.
3) https://www.nu.nl/apps/5453078/fortnite-vijftien-miljoen-keer-geinstalleerd-android-toestellen.html
Interesting blog Ben! Logically I have heard about the game and played it myself, but I have I did not really know about the issued regarding Android’s playstore. I think it is a wise but brave step from Epic Games to offer the game outside of the playstore. So much of the revenue is being taken by Google… Let us indeed find out if Epic games indeed started a revolution in the app industry. I will definitely keep myself informed about this subject.
This is not directly related to this post, but I recently read the financials of Supercell (the company behind Clash of Clans) and because they are so astonishing, I thought they are worth sharing:
“Supercell announced that it earned a profit of $810 million on revenues of $2.029 billion in 2017. That’s an enviable financial accomplishment for a company that didn’t release a game globally in 2017 — and has only released four games in its seven-year life.” (https://venturebeat.com/2018/02/14/supercell-2017-results-810-million-in-profit-2-billion-in-revenue-without-a-new-game/). So the
Hi Claudius,
That is indeed very astonishing. I think we should get into the online gaming app industry!
Thank you for sharing this with us, Ben. I do see your point that Fortnite is bypassing Google by making Fortnite Mobile only available through their own website. However, Fortnite already had a large number of fans from the desktop version of Fortnite, which made it possible for them to release Fortnite Mobile in this way. How do you think smaller developers, that do not have a large fanbase yet, could bypass Google’s Play Store? Would you perhaps suggest a seperate Android appstore or something similar to WeChat’s instant apps?
Very valid point Chris!
Currently, I don’t think there’s a way for smaller app developers to bypass either the iOS or Android app stores. I honestly think Fortnite is the first recent example that is trying to do this, paving the way for others. I think that a lot will change in the near future, but it will start with more already popular games/apps from bigger developers, like Epic Games. WeChat’s instant apps could definitely be a new platform for this!