I recently tried the mega-popular online video game, Fortnite, and while my interest was purely in the name of business research, I did end up spending almost six hours of a Saturday completely raptured with it. I can see why it is so popular.
To give you an idea of just how popular Fortnite has become, in just the two years since its launch in 2017, the game now has more than 250 million registered users (which puts it just behind Indonesia as the fifth most populous region in the world) and has reported as many as 78.3 million users playing simultaneously (August 2018).
Maybe equally as interesting is how many people are also watching the game.
This past weekend, the first Fortnite World Cup Tournament was held in the famous Arthur Ashe Stadium in New York, a location typically reserved for US Open tennis tournament. The event pitted the best 100 Fortnite players, whittled down from 40 million candidates from around the world, and ended in spectacular fashion with a popular gamer named "Bugha" taking home a $3 million prize.
So why should entrepreneurs care? Because businesses should closely examine the business model Fortnite used to gain -- and keep -- millions of customers.
Leveraging the "Freemium" Model
By now, we should all be very familiar with the Freemium business model, or the practice of giving away a base product or service while offering additional paid ancillary products and services. We have become so accustomed to this model through our mobile phone apps that in some ways it has become expected -- for all the good and bad that comes with it.
The problem with most freemium models is that the initial product or service often isn't usable without additional purchases. In some cases of apps, you are required to pay before you even try it. It is deceiving and creates ill-will.
Fortnite is free to download and use, and more important, players can take part in all of the gaming, events and experiences without ever paying. More important, your level of play and ability is not influenced by the amount of money you spend, so whether you have paid or play for free, everyone is on the same level and enjoys the same services.
So if you can play for completely free, then how has the game made the Founder and CEO of its parent company, Tim Sweeney of Epic Games, a billionaire?
The genius of Fortnite is that the company make really good ancillary "products," which in this case are in-game "skins," which affect your appearance. They also sell accessories that a player can buy and use to upgrade how they look, and even offer different dances that your character can do.
All products are based on customization and vanity, which is becoming more expected by younger generations.
More important, these Fortnite vanity items are only available for a limited time, so it creates an immense sense of urgency among players (also known as FOMO) who enjoy customizing their character.
Lesson: The freemium model is a valuable business model for startups looking to gain traction. To succeed at using this model, companies need to build and find a balance between value and urgency in their ancillary products and services.
Telling a Story
If you play Fortnite, you know that beyond the game itself, the developers are constantly changing and evolving the story, from pirates to aliens to zombies to mystic creatures. Each season introduces a new plotline and often alters and introduces new landscapes on which to play. Moreover, stories and landscapes evolve in real time, with events happening live as players are in the game.
The game always evolves.
Lesson: Tell a story that evolves around your customers. While having an origin story is important to build your culture and gain a following, companies can encourage loyalty by building an ongoing story and allowing its customers to be part of and even integral in that story.
Creating Unbeatable Experiences
I do not play Fortnite regularly, but last weekend, I got pulled into a live event in the Fortnite world, which required me to log on and actively take part. The event, which happened in "real time," pitted a huge sea monster (think Pacific Rim) against what appeared to be a Voltron-inspired mega-robot.
The details of the battle are not important, although it was a very well-done cinematic experience. Instead, it is important to know that Fornite regularly holds these types of events, which is yet another way to engage with its users. By offering a once-only event, it also creates urgency and encourages customers to get excited about returning.
It is also worthy to note the number of people who watched it. According to GitHyp, a service that tracks Fortnite viewership on Twitch, the event had 606,000 concurrent Twitch viewers, though real numbers are difficult to determine because that does not include the percentage of the 250 million registered users who might have logged into the game to experience it in real time -- like me.
For a better example, consider the live Fortnite concert by musical artist, Marshmallo, that the game developer reported had 10.8 million concurrent players logged on to see.
Lesson: Create unbeatable experiences that your customers cannot get anyplace else, and they will have every reason to keep coming back.
I have really come to respect Fortnite, not because of the game or the tournaments, but because of how Epic Games has turned gaming and business on its head. Giving away a free game and masterfully creating a culture and following willing to continue to pay for products and tune in regularly is the dream of every entrepreneur.
More important, Fortnite has created a business model that at least 250 million people may well come to expect. And while not all businesses can leverage the same model, it will be critical for entrepreneurs to understand that evolution and change are more important than ever in creating a loyal and sustainable customer base regardless of business model you follow.