Fortnite shares shop revenue with creators based on engagement

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 2:32:57

   game so what what is the the kinds of standards that you're thinking about uh building such that people can sort of have an identity almost travel between games and that kind of thing let me start with the present of gaming and why it sucks that's a good start sure fortnight is an awesome thing you go into fortnight there's you know 100 million monthly active users there a huge number of your own friends are there you can play with them go from experience to experience seamlessly without leaving the app um there are a hundred thousand different islands you can play on and some of them are really awesome um and there are constant new ones coming out and constant things to do um if you want to play roblox all right you quit out of the fortnite app you launch the roblox app different program different friend system different account names your username in

2. 2:33:45

   fortnite and your username and roblox are different names and they're not connected to each other so you have to remake all your friends and then find different you know things to play and now the controls are different so you have to relearn how you know the joystick mouse keyboard controller uh works in that experience and you have to go from place to place and you buy some stuff in fortnite and it's really cool and you can use it anywhere in fortnite and then you go in roblox and you don't have that stuff you have to buy different stuff and that stuff only works in roblox and same with call of duty it's another isolated place um and same with world of warcraft and same with league of legends and every other every place you go is its own unique place different friends, different account names, different people, and there's no social cohesion between

3. 2:34:24

   them at all. And a long time ago, consoles set out to solve this problem by creating their console-wide friend system and account. So your friend on PlayStation in one game is your friends on PlayStation in another game, but only on PlayStation. If you're on Xbox, you can't see PlayStation friends. And so you have two basically orthogonal and cross-cutting divisions of the world into fiefdoms uh you know which were not created with bad intentions but arose and are you know separated isolated islands one is the platforms and their social services xbox playstation nintendo it's steam epic if you add it to the list and the other is these different games people play and you know because of this weird historical artifact we're we're left in a world where people can't seamlessly move from games to games bringing their

4. 2:35:12

   friends and their stuff. So the solution to this is to federate and connect all of the systems together. All the players on all the different platforms can be recognized by their name and put the at sign in it so your Xbox names and your Fortnite or Epic names and your Steam names can all live together and interoperate together in a single space. So unifying the social ecosystems is one thing that needs to happen. The next and bigger challenge is to unify the economies too.

5. 2:35:40

   Now, I'm not talking about a sword you have in World of Warcraft should work in Fortnite. Every game is going to have its own gameplay rules, and a lot of games are going to have stuff that only works in them. But there's a huge set of games that have in common the idea of a cosmetic system that does not affect gameplay outcomes, but is purely cool looks and cool appearances. Most of the major multiplayer games have them.

6. 2:36:08

   um and you know if you look at games you could probably bundle together about 70 of them and say they're similar enough that they could actually under operate um that you could own an outfit in fortnite own an outfit in roblox and own the same outfit and maybe call of duty um and maybe you know 100 or 200 other games and actually expect they would work together and you find other kinds of items are probably underoperable too like fortnite has car outfits so you can um you know buy different appearances of a car and when you find a physical car in the world of fortnite if you're the first person to get into it in that session boom it takes on your you know your chosen car cosmetic um and now you have a cool car uh that's identifiable as yours um you know we realized early on with fortnite that the key to making fortnite work as a creator economy was to open

7. 2:36:57

   up the revenue from the item shop to all the sources of engagement right there are two big things happening um in fortnite that make it work as a product and as a business one is the game modes fortnite battle royale and all the user modes and everything else are sources of engagement people play there uh because it's super fun and because they're playing there they're willing to buy cool stuff to make their character look cooler um and so you have all these sources of engagement but the sources of engagement don't make money directly you can't spend money in fortnite battle royale to buy a game item like everything's you know the gameplay is not pay to win and it's all just a game so we make money from the item shop uh and the item shop only exists because of the sources of engagement if you weren't playing battle royale trust me nobody would want to buy

8. 2:37:44

   a fortnite outfit if you weren't playing any fortnite games why would you buy fortnite outfits and so you have all the revenue in this item shop economy and all the engagement in this engagement economy and the thing that magically makes the fortnite creator economy works is revenue sharing Item shop spending, according to sources of engagement, by engagement. If you buy an item and you've played, you know, 40% of your time in Battle Royale and 60% of your time in these user modes, the money you spent, the portion of that that's profit can be separated out and paid out to all the different creators who participate in that economy.

9. 2:38:16

   And that's why Fortnite scaled up to a $400 million creator economy so far and is growing. It's amazing.