The Fortnite Effect
Fortnite is one of the most profitable games in history—and growing. Since launch, the free-to-play game has brought in more than $1.2 billion in revenue. I also holds the record for most revenues in a single month: $318 million in May.
Fortnite was massively successful. It is not the first free-to-play game with in-app purchases, but its combination of Minecraft and a 100-person massive multiplayer shooting and its cartoon-style graphics amassed 125 million players in less than a year. And Epic Games had the perfect tool to monetize on this pool: by offering new skins, accessories and emotes almost every day.
This unprecedented success encouraged the likes of Call of Duty and Battlefield to release their own Battle Royale modes, which seems to have slowed down Fortnite’s mind-boggling growth. Players are now selling their Fortnite accounts and switching to the new games. This, however, is a violation of Fortnite’s EULA.
The Black Market
“Tfue” is one of the top Fortnite players, whose account was banned for violating the EULA. His attempt was to sell his account, which he does not own: according to Epic, the account belongs to them. This is not an isolated incident: gamers can buy Fortnite accounts fully loaded with skins and dance moves on unofficial marketplaces like eBay, where sellers give the email and password of the advertised account to the highest bidder.
The reason behind Epic Games’ crackdown is not only that they lose an opportunity to profit on these transactions, but also because it promotes a market for stolen accounts. In fact, there have been reports of players claiming that their accounts have been hacked and that they’ve noticed fraudulent charges on their accounts.
So, here we are facing a bottleneck problem: we have a highly profitable business model with unprecedented success in history, which is still facing tons of limitations. Players don’t own their accounts, they can’t sell or purchase accounts (legally) outside the game’s framework, and they have to start over from scratch when a new blockbuster game is released as they cannot transfer anything from the previous game. Epic Games is probably missing out here big.
A study by Worldwide Asset eXchange (WAX) on 1,000 gamers and 500 developers discovered that “62% of gamers feel having the flexibility to transfer virtual items from game to game would make spending money on those items more worth it.” It continues: “In fact, close to three-fourths of gamers said they would purchase virtual items if they could use them in multiple games.”
This tendency also holds true for the game developers: “84% of developers surveyed would create in-game items if they were compatible with multiple, different games.” This makes sense, considering that “66% of game developers said virtual items are a pivotal component of their game’s monetization strategy and item value is being suppressed by unnecessary publisher control.” It seems like this time, blockchain is the silver bullet.
Blockchain for gaming
With blockchain for games, in-game items will have even further impact and value than they did under Fortnite. Items will be transferable between games, which gives more incentive for players to buy them when they can reuse them. Scarcity will also start playing a role, which not only increases the value of certain items but also creates new options for gameplay. Imagine having Thanos gauntlet in Fortnite—which was available only for a limited time—as an item on the blockchain!
As pointed out by WAX’s study, developers are also encouraged to create more in-game items when they can resell them across several games. But there are also other benefits. “As the market leaders, Steam, Apple, and Google have the power to charge developers high commission fees, immediately eliminating small developers from taking part and achieving success,” said David Hanson, Co-CEO of blockchain-powered gaming distribution platform Ultra. “Blockchain has the power to address these challenges and redefine the gaming industry as we know it by making it possible to process payments instantly, which will allow developers to quickly reinvest money into their businesses.”
Hanson also points out the benefits blockchain brings in fraud prevention, as the immutable nature of this technology “facilitates fraud-proof marketing which provides developers with the ability to spend their marketing resources effectively and track that these resources are legit.”
But, promising as it sounds, blockchain is not without problems. “The main obstacle at the moment is not so much in developing in-game items, but the difficulty in onboarding new users,” says Igor Barinov, Tech Lead of the POA Network.
“To play a game on the blockchain, a new user must go through so many steps, from installing a web wallet like MetaMask or Nifty Wallet, to understanding concepts of gas and Eth, to figuring out how to get Eth to pay for gas and fuel in the first place!”
Some games, such as DopeRaider, have reduced the steps necessary by relying on services like Portis, which allows users to simply play the game by registering with an email address. Barinov hopes that “once the onboarding process is simplified, mass adoption will quickly follow,” to an extent where users will not even realize they are using a blockchain system.
Fortnite’s massive success dependent on new items being created every day. Blockchain makes this possible by both incentivizing developers and encouraging the players. Perhaps a new “Fortnite” awaits in blockchain. We just have to simplify the technology for the average users.