Unless you live in a ridiculously remote area of the globe, it would be hard not to know about the video game ‘Fortnite’.
Developed by Epic Games, it launched in September 2017. Since then it has become one of the most played and famous video games in the world.
As of May 2020, Fortnite had 350 million registered players. The recent Marvel Galactus event it hosted at the end of 2020 saw a record 15.3 million players log-on concurrently.
It rakes in the cash too. In 2019, Fortnite brought in revenues of $1.8 billion, according to data reported by SuperData Research, a Nielsen Company.
Its success makes Fortnite a fascinating case study from a marketing perspective. Not only in terms of the way they have driven their own success but in how the game has become a marketing platform in its own right.
This article is going to break down that success, extract some lessons and present some questions that may help you with your own marketing strategy.
The Four P’s
Most marketers will be aware of the Four P’s framework for marketing tactics: Product, Price, Promotion, and Place. I personally am still a big believer in the Four P’s even in today’s complex marketing environment. To quote Professor Mark Ritson from his Marketing Week column:
A word on the four Ps. Anyone with a marketing brain and experience knows that product, price, place and promotion are the unequivocal, eternal set of tactical levers. Sure, the constituent ingredients that make up promotions or pricing has changed dramatically over the decades, but the general concept is as applicable now as it was in 1960.
They also make a handy framework to discuss how Epic made Fortnite a massive success.
Product
Fortnite is probably the most famous example of the now burgeoning Battle Royale genre (named after the seminal film).
100 players are placed on a flying “Battle bus” that takes a direct line over the island (which is different each time). Players can then choose when to jump out and head down to their chosen landing spot.
From there they loot buildings trying to find guns, grenades, shields, and more in order to defend themselves or attack others. They also gather materials that can be used to create defensive and offensive structures. This creative building capability is one of the major differentiators for Fortnite.
As time moves on, a circle appears on the map. The players have to make it into that circle before the “Storm” closes in — players stuck in the storm take damage and if they fail to get into the safe circle in time can be lost to the storm.
It’s this mechanic that forces the remaining players into ever smaller circles, whittling down player numbers as they take each other out or the storm does. Eventually, one person (or team if you’re playing in team modes like duos or squads) is left standing and is the victor.
Not the original idea
What makes Fortnite so fascinating is that this was not the game that had been developed since 2011 and originally launched. Epic had something completely different in mind called Fortnite: Save the World.
It was a Player Vs Environment (PVE) rather than Player Vs Player (PVP) game where players gathered resources during the day, built fortifications and tried to survive the night in an environment where the sudden appearance of a worldwide storm causes 98% of the world’s population to disappear, and zombie-like creatures (or husks) to rise to attack the remainder (especially at night).
Indeed, the name Fortnite is a portmanteau of “Fort” and “Night”.
It went on sale as a standalone game and didn’t really set the world on fire sales-wise.
An inspiration emerges
Around the same time, a game called “PlayerUnknown’s Battlegrounds”(PUBG) was becoming very popular within the PC Gaming community.
PUBG was the spark that ignited the Battle Royale craze. The original prototype for the game was developed as a mod by developer Brendan Greene within the hardcore military simulator ARMA 2. Over the years, support for the mod grew and he was able to translate that into developing a fully standalone game.
It wrote the manual for some key features that exist in pretty much every battle royale game —being dropped on an environment with nothing, the looting, the shrinking play area — but in contrast to Fortnite it was much more “realistic”.
PUBG featured real guns for which you could find a million attachments (sights, silencers, etc). There was blood when your shots landed on an opposing player. There were real vehicles that needed fuel.
When all else fails — Pivot!
Developers at Epic were playing PUBG and loving it. And here is the first great decision Epic made — they decided to try and create their own version with the Fortnite engine.
Crucially, they kept the game simple. Fortnite PVE had lots of complex features they decided not to port across into the Battle Royale mode from the off. That meant that they could focus on making the core game smooth and stable and, most crucially, fun.
The cartoony, kid-friendly aesthetic from Save the World carried over into Battle Royale. There was no blood. Players who were eliminated simply disappeared as though being removed digitally from the play area. Critically, this made it available to younger age groups to play.
Keep them playing
Since it launched the goal has been to keep players active. Something they have managed to achieve even if their player base has reduced from its peak — something that was always going to happen as traditional juggernauts of the gaming world like Call of Duty and Battlefield launched their own versions of Battle Royale.
This focus on evolution has led to regular updates to the map, new weapons, adding in vehicles like golf carts and planes, seasonal events and content, new player skins, partnerships with other brands, adding in lore to the game, new game modes, a sandbox creation area without combat and more.
Epic are always on looking at game balance every time a new element is introduced. If one gun or set of tactics is overpowered it becomes the game’s meta — the dominant way to play and win — and is adopted by large swathes of the player base. Epic wants to provide options for different play styles to keep it interesting so they “nerf” said weapons to try and create balanced and varied ways to play.
Progress has a cost
All this to keep players engaged in the game. It comes at a cost to the developer, however. An investigation by games website Polygon highlighted issues:
“…the game’s explosive growth led to months of intense crunch for Epic employees and contractors, some of whom say they felt extreme pressure to work grueling hours to maintain Fortnite’s success and profitability, resulting in a toxic, stressful environment at the company.”
Despite this, Fortnite’s Product story is one from which lots of lessons can be taken.
Lessons to be learned
a. Avoid the sunk cost fallacy
Nobel prize-winning psychologist and economist Daniel Kahneman describes the “Sunk Cost fallacy” in his book ‘Thinking, fast and slow’:
“All too often a company afflicted by sunk costs drives into the blizzard, throwing good money after bad rather than accepting the humiliation of closing the account of a costly failure."
The original concept for Fortnite wasn’t necessarily a costly failure but it wasn’t a major success either. The decision to move to the Battle Royale game as it gained ground and focusing resources on its development is a great example of removing emotion from a key product decision.
b. Launch an MVP and iterate from there
This is a lesson taken straight from Silicon Valley but in my experience, there’s too much emphasis put on the ‘Minimum’ and not the ‘Viable’. Something is launched that doesn’t meet core customer needs and that can damage perceptions of future iterations. I’ve seen it happen up close and it’s not fun.
Epic made sure the game they were creating was a good game from the off. It worked, was smooth, fun, and playable from day one. They laid solid foundations upon which they built.
c. Something about keeping fresh?
Questions to ask about your own marketing:
- Are we holding onto campaigns, brands, products or services that aren’t working that we shouldn’t? Are we letting emotion overrule logic?
- Are we waiting too long for a perfect product before launching? Conversely, are we guilty of launching products that don’t solve a customer need well from launch just for the sake of launching?
- Are we keeping our customers active within our service? Are we continually challenging and improving or resting on our laurels?
Price
Video games offer a multitude of ways to pay for them. From a simple one-off transaction fee, a subscription model like World of Warcraft, to a free to play model where players can make small purchases (or Micro-transactions) for in-game items. There are plenty of choices.
When Fortnite: Save the World launched it was with a one-off transaction fee. The original plan was to include the battle royale within that cost — you’d have to pay to get access to it.
Two weeks before launch they changed their minds. The cynic in me says because Epic wasn’t exactly confident that Save the World would sell loads of copies. Even then it would be an extra hurdle to trying it out.
Instead, they went for a free to play model in order maximise downloads for a new IP. A smart move in terms of reducing friction. They chose to monetise their game through microtransactions driven by the game’s internal currency “V-Bucks”.
Now usually the word Microtransactions brings gamers out in a cold sweat. That’s usually if they are deployed in the following ways:
- They’re pay to win. If your micro-transactions allow players to get access to items that improve their chances of winning, gamers see that as unfair and taking the skill out of the game.
- When you’ve already paid full price. If you’ve already paid upwards of £45 to buy a game, players don’t take kindly to spending additional money on items. They expect it in-game.
Combine these two and you really are going to piss a lot of people off.
Epic didn’t do either of these things. They were free to play and the micro-transactions were for purely cosmetic items. You could play Fortnite, not spend a penny and be competitive.
But people do spend: In 2019, Fortnite user spending on gaming DLC in the United States reached an average of 82 U.S. dollars.*
The arrival of the Battle Pass
Later into the game’s life, Epic introduced a paid battle pass for each new chapter which featured a number of tiers that players climb through by completing in-game objectives and earning those cosmetic items.
Each player has access to the “free” track of the Battle Pass but the paid version offers more challenges and more and rarer items.
In December 2020, Epic added the “Fortnite Crew” monthly subscription plan; those on the plan gain access to the latest Battle Pass, a monthly allocation of V-Bucks, and access to exclusive cosmetics only available to subscribers. Signing people up to a subscription model obviously helps solidify revenue streams — especially since they have set it up as an auto-renew model.
Lessons to be learned
a. Frictionless access to your product or service is crucial: The first rule of Behavioural Economics — make it easy for the person to complete the desired action. In his book “Inside the Nudge Unit”, David Halpern wrote:
Just as a real weight pushed across a real table will soon grind to a halt as a result of friction, a human impulse to do something soon grinds to a halt when it becomes a hassle.
Epic used the free to play model to reduce friction and allow maximum access.
b. Solidify your revenue streams: Subscription models create a solid revenue base for any business. They create some level of certainty around future revenues. Especially with auto-renew as a default.
Defaults are extraordinarily powerful in behavioural economics terms. They’re powerful because of something called the ‘Status quo bias’. Here I shall defer to Richard Thaler, author of ‘Nudge’, a seminal work in Behavioural Economics:
“…consider what is called the ‘status quo bias,’ a fancy name for inertia. For a host of reasons, which we shall explore, people have a strong tendency to go along with the status quo or default option.”
In addition, paying money regularly for something increases your chances of using it. Coming back to the Sunk cost fallacy, if you pay $11.99 a month and don’t play Fortnite, mentally you have “lost” that money. It encourages play.
c. Use behavioural science.
Whilst they maybe didn’t realise it at the time, Fortnite deployed several behavioural science principles with their product that drive positive, and negative, behaviour:
Reciprocity — this is essentially the principle of “You scratch my back and I’ll scratch yours.”
By making a game as good as Fortnite, making it free, pushing for player benefits like cross-play, Epic gave players hours and hours of a great experience. They created an amazing value exchange and used reciprocity to ask for a purchase in return for that.
Goal gradient Effect — According to Jennifer Clinehens, author of ‘Choice Hacking’:
“….the Goal Gradient Effect states that as people get closer to a reward, they speed up their behavior to get to their goal faster. In other words, people are motivated by how much is left to reach their target, not how far they’ve come.”
Epic took this to heart when designing the levels of their battle pass. The image below shows the progression through the Battlepass and crucially what is available the further they progress.
Loss Aversion — FOMO, or The Fear Of Missing Out, is a huge psychological driver for behaviour within Fortnite. It’s a social anxiety in which people are scared they’re being left behind or left out.
It’s driven by something called Loss Aversion — the principle that people will go to great lengths to avoid losing. That’s because the pain of losing something is twice as powerful as the pleasure of winning something.
In this case, the loss is seeing what you could have had if you’d bought the Battle pass (handily shown in the image above) and by seeing other players items whenever you play the game.
NB There is a dark side to this however with reports of kids being bullied and ostracised for not having premium skins as reported in this article. In this case, kids are trying to avoid losing social status and currency. Calling someone a “Default” (referring to someone playing in the Default skin Fortnite provides) has now become an insult showing how far Fortnite has penetrated the general consciousness.
Scarcity — This one is simple. Restrict something’s supply, either through time limits or through numbers available, and you raise desirability. This too relates back to Loss Aversion and the fear of missing out.
Epic is very smart at limiting in-game items through the use of time windows. Items can disappear forever or certainly for months.
They even tried this with the whole game! Before Season 2 launched in 2020, Epic took down Fortnite for a couple of days, put an image of a black hole in its place and watched viewer numbers soar on streaming platforms like Twitch.
Questions to ask about your own marketing:
- Are we making using our product and service as frictionless as possible? Can we simplify anything further?
- Are we providing a positive value exchange for our customers? Are we asking too much from our customers relative to what we are giving them? Could we ask more?
- Do you have the right pricing model? What other pricing models could we try to solidify revenues or open up new markets?
- Are we using Behavioural Science principles in our pricing and customer experience generally? What principles can we deploy effectively?
Place (Distribution)
In his seminal book “How Brands Grow”, Professor Byron Sharp describes two drivers of brand growth: Physical and Mental Availability.
Mental availability describes how likely you are to recall a brand in a given buying situation. Physical availability essentially covers how easy it is for category buyers to find and buy your brand.
Well, Epic nailed the latter. Launching on PlayStation 4 and Xbox One (stealing a march on their then competitor PUBG which was only PC based), Fortnite soon expanded onto pretty much every device — PC, Nintendo Switch, Mac, iOS and Android mobile devices, and the new consoles PlayStation 5 and Xbox Series S & X. Basically anything that will run the game.
Originally only available on digital storefronts, they even created a physical product that could be bought in retail stores like GAME or Gamestop (See the image below). No disc included mind you- usually the box held a digital code within that bundled V-Bucks, skins, items, etc.
But it allowed Epic to have a presence in stores where some gamers still shop and gave parents and grandparents something they could wrap at Christmas and Birthdays.
The crossplay revolution
The final element that supercharged physical availability was Cross-platform play. Prior to Fortnite, PlayStation owners played with PlayStation players, Nintendo with Nintendo, etc. Platform holders wanted players within their walled garden.
Epic wanted to allow crossplay — essentially allowing customers to play in the same game regardless of device. This removes barriers that prevented gamers getting on the Fortnite train and enabled friends to play together regardless of the platform owned.
Sony was the main holdout as the dominant console of the generation. They had been pushed on crossplay before but the popularity of Fortnite forced their hand and one of the last bastions of the console wars was pulled down. That seal, now broken, many multi-player games now offer cross-play.
Lessons to be learned
a. Maximise your product or service's physical availability. This one is simple. Do everything in your power to ensure that your product has high Physical Availability.
Professor Sharp believes that it can be broken down into three main areas:
Epic ticked the first and last box by being on every device, and in every place, games can be bought. Their rapid success enabled them to tick the second box and have prominence across every storefront, physical or digital, that they wanted.
b. Don’t piss off important distribution channels. In recent months, and in the desire to more directly control the relationships with their player base, Epic added the ability to buy V-Bucks directly from them in their iOS and Android apps. Seems fair enough.
The problem is that Apple strictly forbids the direct selling of currency directly. They only allow it through their payment mechanisms and charge 30% of sales for the privilege. This obviously increases the cost of the V-Bucks above what you’d pay directly. Epic felt this was Apple unfairly using a dominant marketing position to line their pockets.
The result of all this was Fortnite being removed from the App Store meaning no new users and no updates for existing players. Oh and some lovely legal action between the two behemoths.
Epic confirmed that Fortnite for iOS made up around 116 million users of the total player base that was reported in May of 350 million. That’s a pretty hefty slice of players gone from their player base!
Questions to ask about your own marketing:
- Are we available to our customers in as many ways as possible? Are there other routes to market that we have not taken?
- Are we over-reliant on one distribution channel? What happens if that channel is taken away? Do we have a backup plan?
Promotion
Having worked in the games industry both in retail and at a publisher, it’s clear that the playbook for launching a video game has two main plays:
- Build awareness and drive as many pre-orders for the title as you possibly can. Pre-orders don’t always translate to day 1 sales but from my time running the Insight teams at GAME Retail there is a clear correlation.
- Hammer the first week or two hard. You fire a vast bulk of your ammo to get a fast start — as many marketing channels as possible.
Fortnite’s battle royale mode wasn’t like this. It grew organically at first picking up players through referrals, promotions on digital storefronts and more. But there was one thing that really kicked it up a notch: Streamers.
The rise of streamers
People watching people play video games sounds odd until you actually try it. You realise that people are there for one, or all, of the following reasons:
- To get better at a game by watching someone more talented than themselves play and explain what they’re doing.
- For the social element of interacting with the streamer and the other people watching through the live chat mechanics
- Because the streamer is just entertaining regardless of the game they are playing.
It's a growth industry. According to data from Streamlabs, the streaming industry has grown some 91.8% year-over-year, with 7.46 billion hours of content watched in 2020. Twitch, YouTube, Facebook, and Mixer have created celebrities of some streamers like Dr Disrespect, Shroud and the King of Fortnite, Tyler ‘Ninja’ Blevins.
They were also crucial to the growth of Fortnite. And Fortnite was crucial to the growth of Streaming.
According to CNBC, in September 2017, “Fortnite” made up less than 1 percent of the content produced by streaming channels. Fast forward to June 2018, and that number jumped to 49 percent.
Even a few years later, it is still a big attraction. This graph shows the average viewers of Fortnite on Twitch worldwide from January 2018 to November 2020 (in 1,000s) according to Statista.
It shows a slow decline from its peak in July 2018 with a huge jump in May 2020 when Season 2 launched. Since then, it has seen a further decline but it still pulls in strong numbers. To put these numbers in perspective, the title still ranks highly in viewers at present — impressive given the increased competition like Call of Duty: Warzone.
A new marketing channel
Video game publishers are now well aware of the role streamers play. I interviewed Eric Folliot, European Marketing Director for Square Enix (publishers of Final Fantasy, Tomb Raider and The Avengers) recently for a podcast. You can listen to it here. He said:
In terms of how we use streamers — one, it’s definitely eyeballs. It is a key part of your initial launch campagn but also post launch in terms of new content. You hope streamers become fans of your game and do so organically. Not every game has that luxury. In some instances you are required to pay for those guys.
The idea that they are taste makers and influencers as well. I would say the world is moving towards where people see streamers as the friend in the playground that know everything about video games. If they’re streaming it, they’re talking about it, if they’re commenting about it on twitter, then you can tap into that and almost get credibility from that streamer talking about your game.
Financially, you do have to reduce budgets elsewhere and I would say what you might call the traditional channels have probably been reduced — the likes of Television, out of home, Cinema, press and radio. Those budgets get reduced as we fish where the fish are.
Fortnite is now a media channel and Epic a media owner.
Bob Hoffman, former creative director at several large advertising agencies and blogger, once posited in an article:
“For advertising to be effective..it’s not enough for it to be seen by a single person or even by many people. Someone has to know that everyone else has seen it, too."
He argues that the collective nature of TV ads within the Superbowl for example ensures that collective experience:
“I know that if they’re watching football they’re seeing the same ads I am. Consequently I have reasonable confidence that my friends believe that Nike makes acceptable running shoes, Ford makes acceptable pick-up trucks, and Coors makes beer I don’t have to feel weird about.”
We’ve all heard the stories of TV dying or being dead. Whilst that is overhyped to an extent, it is true for younger audiences that its effectiveness as a collective medium is diminishing as shown by Ebiquity research paper ‘Mind the gap’.
But what can replace that collective experience? Well, maybe Fortnite and games like it can provide an answer. Brands are desperate to get access to an audience to drive awareness of their products and services and Fortnite has been proven to provide scale. Consider the following (sourced from Wikipedia and The Verge):
- EDM artist Marshmello held a virtual concert in the Pleasant Park location on February 2, 2019 estimated to have had over 10 million players watching it live.
- Travis Scott performed a virtual “Astronomical” tour in support of his 2018 album Astroworld within Fortnite between April 23 and 25, 2020. The first performance was estimated to have drawn over 12.3 million players to watch, while a total of 27.7 million unique viewers cumulatively watched the concerts
- The Galactus event, which concluded Fortnite’s current Marvel-themed season, had a record 15.3 million concurrent players
These kinds of numbers have attracted major brands and franchises like the NFL, Marvel, Star Wars, the Tenet movie, John Wick, and more. All because they promise exposure to an audience within a collective experience which is hard to get through other channels.
Lessons to be learned
a. Streaming could be an opportunity for your brand. Streaming may well be an opportunity for your brand. Marketing is obsessed with youth and where better to access young players than through their favorite streamers.
Be careful though. It’s easy to mess it up as Burger King did.
Donations are a key source of income for streamers and a way for viewers to interact with streamers and show how much they value their content. In lots of cases, the streamer uses text to voice software to “read” out the text the viewer has added to the donation.
However, this feature was taken advantage of by Ogilvy, Burger King’s marketing agency, who used a bot to donate $5, handily the same price as a Burger King value meal, to popular streamers. A promotional message accompanied them which was then read out.
Streamers were not happy campers, feeling somewhat violated over the use of the donation function and the idea of being attached to a brand that they may not have chosen to partner with. You can read more about that here.
If you want to do it properly then there are agencies that can help you do just that like WeHype.
b. Use games as a marketing channel themselves. Platforms like Fortnite or Call of Duty: Warzone are, it could be argued, collective experiences that act as an additional tool for a marketer's toolbox. Especially if you are looking for a top of the funnel, awareness driving alternatives to TV.
Choose the right game for your brand and then explore the best way to get your brand involved. Just make sure you fit — you don’t want to be seen as that older person trying to be cool….
Questions to ask about your own marketing:
- Could the audience that streamers reach be an audience that fits with your brand?
- Are games a marketing channel you should explore?
- Do you understand the ins and outs of a marketing channel before you use it? Are you clear on its purpose and role in your integrated marketing plan before you use it?
The Final circle
Fortnite’s star may have waned a touch recently but it is still putting up amazing numbers. It provides both lessons for marketers to learn from but also an amazing platform to access large groups of customers with your message.
Video games and the platforms they provide, whether in-game, through streaming or even eSports are, I believe, undervalued in terms of their value to marketers. If they’re a good fit for your brand you really should check them out. Give us a call at LiquidCX and we’ll help you do that.