'Free' Game Making $300 Million Per Month? But I Thought You Can't Make Money On Free…

from the old-school dept

For most of the first decade of the millennium, we would post over and over again about content business models and how “free” content makes a ton of sense as a component of a business model. And yet, people in the legacy entertainment industry would laugh and laugh, and talk about how “you can’t make money on free.” You even had folks who claimed that if you gave away anything for free it proved you had “no fucking clue” about how to run a business. My favorite may have been Doug Morris, who was boss of Universal Music and then Sony Music, insisting that there was no way anyone in the recording business could make money on “free.”

These days, that’s all looking pretty silly, but just to drive home the point: the insanely popular free video game Fortnite made $318 million last month. Not last year. Last month. And it’s free. Of course, as we’ve always said, the whole point of free is not that free is the business model, but that free is a part of the business model. And that’s exactly how Fortnight works.

Even better, all of that revenue comes from nonessential in-app purchases. You don’t ever need to pay any money to play Fortnite. And, if we went by what the entertainment industry “experts” from years past would tell you, if that’s the case no one will ever pay. Except, obviously, they are, to the tune of over $300 million per month. Why? Because, they’re still buying an actual scarcity: mainly different skins or dances/moves that let them show off. In other words: fashion. Something to make themselves distinct — to stand out. That is a scarcity. Even in a digital world.

So, Fortnite is yet another example of how someone is taking a digital property, and leveraging free to attract a massive audience, and then figuring out ways to charge for a scarcity that people actually want to buy. And people are paying like crazy. So, can we put to rest the idea that you can’t make money off of free yet?

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Comments on “'Free' Game Making $300 Million Per Month? But I Thought You Can't Make Money On Free…”

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56 Comments
hij (profile) says:

Freedom is hard to control

This is all well and good, and it is nice that people are making money. What this does not account for, though, is that it is very hard to make something free and control what they are doing. There is no point in doing business if you cannot control people and force them to do what you want them to do. Without that incentive then greedy narcissists will not want to create businesses, and we will all suffer.

Darkhog says:

Re: Freedom is hard to control

You don’t force anyone to do anything nor you control them, period.

You can ask, you can request and if you’re a good person, then most people will do what is needed. Look at Warframe – perhaps a better example than Fortnite because Warframe was at this for YEARS. There are no competitively advantageous items in Warframe’s F2P shop. There are only skins and other non-essential items.

Moreover, the Warframe devs are pretty much the embodiement of Techdirt’s CwF+RtB formula – they listen to the community (not fake listen, like EA, actually listen) and react to the community’s requests in a way that makes them happy.

One time they’ve actually REMOVED a feature that was making them money. Why? Because fans weren’t happy with that.

Assholes are everywhere and there will be always people who won’t want to pay for stuff no matter what. But if you’re a decent person, you WILL get paid, given you have a decent product as well.

PaulT (profile) says:

Re: Re: Freedom is hard to control

I don’t see anything in the article that states that this is something completely new. This is more a case of “to those people who wouldn’t listen when I explained that it was possible to make money from free products, look at this monster!”. There are many, many examples that predate this one, it’s just notable because this is both the currently talked about one, and there are some very large numbers involved.

“Assholes are everywhere and there will be always people who won’t want to pay for stuff no matter what”

This is always worth repeating. I’ve always said that there are 3 kinds of people – those who will always pay directly, people who will pay for nothing and people who do a little of both. Much of the focus has been on trying to force the second group to pay, while not realising that not only is the latter group far, far larger but often spend more than the former.

Thankfully, various industries are waking up to these facts, although it has been a long time coming.

Anonymous Coward says:

"no way anyone in the recording business" -- NOT GAMES.

RECORDING BUSINESS. You are yet again, as ever, trying to sneak past us a claim of universal application when "free" only works in specific circumstances.

No one disputes that "loss leaders" and so on work! It’s STANDARD advertising schtick for last 100 years! Apparently you hope your audience is just stone ignorant!

A song or movie is complete in itself — or isn’t satisfying. But I’ve NEVER wanted to buy toys from a movie, posters, or anything beyond read one or two books before saw the movie (specific to new versions), wouldn’t even do that now.

This game gives away the basics, but is designed first and foremost to lure idiots into spending money on "extras". One report from the lands and people owned by the same inbred psychotic Germans who tried to own America said that a kid got his dad’s credit card and racked up $1000 of "extras" over one weekend.

There’s no argument that so long as idiots and children have money, some can be lured into blowing a small fortune on "free". — So, YES, you’re "right" far as goes! — Sheesh. What are you, 13? And have to be validated on the bleedin’ obvious?

But your childish plea for rational people to stop noticing differences in disparate product categories fails yet again.

By the way, Masnick: long ago when I pointed out that for instance Intel doesn’t give away its chips, you responded with link to Wal-Mart giving away free samples from manufacturers as refutal, and it’s NOT the same as downloading data, that’s still just silly.

Anonymous Coward says:

Re: Re: "no way anyone in the recording business" -- NOT GAMES.

lol

LOL, LOL! — You are actually ambiguous as to whether agree or like my spiel, but reckon it’s best you can do.

Thanks for so well typifying Techdirt’s ability to respond to substance.

Here’s your target audience who buys the trick of "free", Masnick, with an expressive "lol".

Anonymous Coward says:

Re: "no way anyone in the recording business" -- NOT GAMES.

Though most of your post is incoherent rambling and fact inversion it does contain a nugget of truth:

The free-to-play model works for games because there are countless hordes of penniless gamers (read: 10 year olds) who will play free games but not paid games. Hordes create a version of “popularity” which attracts other players. Some of these players have money to spend and will do so willingly for nonessential virtual items, titles, etc. in these games. If the game doesn’t suck this model can be successful so long as it can build critical social mass.

This model may work in music if there are things that those with money can spend their money on that will elevate them socially within the circle enjoying said music. Since the world hasn’t invented those purchasable things yet I don’t think this would work.

It certainly won’t work in most other areas, including most other applications of software.

PaulT (profile) says:

Re: Re: "no way anyone in the recording business" -- NOT GAMES.

“The free-to-play model works for games because…”

Do you have a citation for the studies that show what you’re claiming, or are you just making assumptions?

“Hordes create a version of “popularity” which attracts other players”

This is as true for paid games as it is for free, though. Lots of people played the likes of CoD not because they think they’re the best games, but because that’s where the other gamers were. Similarly, some great games have lost out, because there wasn’t a critical mass of people attracting people there. Nothing kills a multiplayer game quicker than empty lobbies.

“Since the world hasn’t invented those purchasable things yet I don’t think this would work.”

Gig tickets, festivals, merchandising, fan clubs, kickstarter style rewards and many other things haven’t been invented where you are yet? Or, are you just thinking of people buying digital items because the physical ones somehow don’t count, despite many music fans spending more money on those than they do the actual music?

“It certainly won’t work in most other areas, including most other applications of software.”

Linux and FOSS also don’t exist where you live?

Anonymous Coward says:

Re: "no way anyone in the recording business" -- NOT GAMES.

You obviously have no idea what you’re talking about.

"no way anyone in the recording business" — NOT GAMES.

Please actually read the article. That comment was made by a legacy entertainment executive who didn’t get it. Masnick on the other hand said this applies to the entire legacy entertainment industry.

But I’ve NEVER wanted to buy toys from a movie, posters, or anything beyond read one or two books before saw the movie

You must have have been a really dull kid then. That’s great for you but there are lots of other people (and I mean LOTS) who do exactly that.

This game gives away the basics, but is designed first and foremost to lure idiots into spending money on "extras".

Please explain how this is different than any other marketing scheme for books/movies/songs. They hope if you like the book/movie/song, you’ll buy more merch relating to it.

noticing differences in disparate product categories

Marketing is marketing is marketing. Same principles work across multiple product categories.

long ago when I pointed out that for instance Intel doesn’t give away its chips, you responded with link to Wal-Mart giving away free samples from manufacturers as refutal, and it’s NOT the same as downloading data, that’s still just silly.

Actually, it is the same. Intel gave free chips away (proving you wrong btw) and Epic Games is giving away one game mode for free. Where’s the difference? It’s both marketing and advertising and both have the potential to get people to buy more of their respective products.

Bruce C. says:

Re: Re: "no way anyone in the recording business" -- NOT GAMES.


‘But I’ve NEVER wanted to buy toys from a movie, posters, or anything beyond read one or two books before saw the movie’

You must have have been a really dull kid then. That’s great for you but there are lots of other people (and I mean LOTS) who do exactly that.

That’s the biggest problem big entertainment has with Free to play. Their business model depends on useful idiots (i.e., trendhoppers) just as much as the Free to Play business model. They talk it down for the same reason cable companies talk down cord-cutting: their customers are being scooped up by the competition.

PaulT (profile) says:

Re: Re: "no way anyone in the recording business" -- NOT GAMES.

“Please actually read the article.”

Why would he start doing that now, after so long?

“They hope if you like the book/movie/song, you’ll buy more merch relating to it.”

Or, even if you don’t. I know I’ve actually bought merch related to films I haven’t liked, for example (e.g. I hate Rob Zombie’s version of Halloween, but find the making of documentary included on the DVD endlessly fascinating, I’ve also bought various books, scripts and models related to films I haven’t liked but found concepts or designs interesting).

“Where’s the difference?”

The difference is that he’s still too dumb to understand the fundamental differences between digital and physical goods, so is apparently trying to argue that the Intel thing didn’t count because they didn’t give all the chips away for free.

Anonymous Coward says:

Re: "no way anyone in the recording business" -- NOT GAMES.

A song or movie is complete in itself — or isn’t satisfying.

Or it is part of series, where each work needs to leave a reason for people to look for the next installment.

Also, you are ignoring all the musicians and video makers, along with authors, are making a living on the Internet by giving their work away and selling their ability to create new works, and using patreon etc. to fund their creativity.

Oh, and Linus is hardly poor, despite leading the development of the Linux Kernel. His effort is valuable to industry, and he refuses direct employment or sponsorship by any company using Linux, and so the Linux Foundation was build to support him and other key developers. That is those who benefited most from his work found a way to pay him whilst staying at arms length.

PaulT (profile) says:

Re: "no way anyone in the recording business" -- NOT GAMES.

“RECORDING BUSINESS”

There’s people in the recording business making lots of money too, despite allowing products to be used freely. That fact that these are generally not RIAA members is immaterial.

“No one disputes that “loss leaders” and so on work! It’s STANDARD advertising schtick for last 100 years! “

Then why do you continually argue that making money from them is impossible, if you know they’ve existed longer than any of us have been alive?

“A song or movie is complete in itself”

True. But, people still buy albums, concert tickets, merchandising, etc. etc etc. The mindset that the song or movie is the only related thing that you can sell – and that you can never sell it after it’s been sampled for free – is both wrong and the reason why the industry hacks you worship have been failing for so long.

“But I’ve NEVER wanted to buy toys from a movie, posters, or anything”

YOU don’t. Millions of others DO. Maybe you really are too stupid to understand that valid opinions and activities exist outside of your own head, and that’s why reality is so hard for you to deal with on a regular basis. But, entire industries exist around things that you will never personally do.

“it’s NOT the same as downloading data, that’s still just silly.”

Yes, so why do you insist on comparing non-scarce digital products and scarce physical products when you yourself admit that’s idiotic?

I.T. Guy says:

Re: "no way anyone in the recording business" -- NOT GAMES.

You moron, the music industry i.e. bands when starting out give their music away for free all the time.

Then they give away the rights to the music and lyrics for a paltry fee in the hopes of superstardumb.

“But I’ve NEVER wanted to buy toys from a movie, posters, or anything beyond read one or two books before saw the movie (specific to new versions), wouldn’t even do that now.”

The world need not conform to your standards child.

“This game gives away the basics, but is designed first and foremost to lure idiots into spending money on “extras”.”
No idiot. This game is a full arena shooter. Your own statement here contradicts itself as only extras are sold.

“I pointed out that for instance Intel doesn’t give away its chips”
https://www.zdnet.com/article/intel-core-i7-8086k-is-its-first-cpu-to-hit-5ghz-in-turbo-its-giving-away-8086-free/

Anonymous Coward says:

Re: Re:

If history is any kind of teacher, yes, Fortnite will fall out of favor relatively soon and that cash flow will dry up. Epic Games will also fail to accept this and try to milk the franchise for several more years, throwing good money after bad and disappointing their investors. Meanwhile, some other game company nobody has ever heard of will accidentally create the Next Great Game and swim in pools of Free-to-Play cash for a little while before their time in the sun ends and someone else fills up their own pool.

And so the cycle of software life rolls on.

Anonymous Coward says:

Re: Re: Re: Re:

Free trumps paid every time. PUBG arguably started the genre that Fortnite is in and was considered successful for a while. Then Fortnite came out and destroyed PUBG. The primary difference: The price.

The next big hit might not be free but it won’t earn $300m/mo either. The free version of that game, probably produced by a different company, will kick the first’s backside.

Anonymous Coward says:

Some skins offer advantages

There are a few skins that are harder to see in many places in the game. Those, in my opinion, are the only ones worth getting. Everything else in the game is free if you are patient enough to play through a few seasons and earn enough v-bucks(their premium currency) to buy your first season pass. Once you have that first one, the extra V-buck rewards earned will easily pay for the next season pass plus a few hundred extra.

brad (profile) says:

love your work but

Hi I love your work normally but when you title this stuff like this it makes it worthless for sharing to people who do not already hold your perspective, and when they see this article in a list with others on a search it hits your credibility (with any on the fence about such perspectives) pretty hard.

Yes, I agree. Yes, I think you deserve a chance to vent. It just is right up there with calling the ignorant ignorant when it comes to swaying others. Your free speech perspectives can often be an easy sell to otherwise shitty people and they’re where I like to start when it comes to opening minds about copyrights and free speech. Just keep all audiences in mind when you right your stuff I guess if you want them to read it deeply and pay attention. Or, write for the echo chamber, the nice thing about having a site is you can only hear mostly the perspectives you want to hear if you curate it right. I’ll continue to mostly post nice stuff (OK honestly I don’t remember what I post here usually but great fan love your stuff blah blah)

brad (profile) says:

Re: Re: love your work but

Sorry to have hurt your feelings, that wasn’t my intent, I’m just glad you leapt to Mike’s defense. I’d hoped that spending most of that paragraph spelling out that 90% of the time I’m a fan would have precluded the “If you don’t like it you can GEEEEET OUUUUUT” hurf blurf but hey at least you got to type a thing and show the owners of the site that you are on their side and that constructive criticism is NOT OK as far as you’re concerned.

Good work 😉

Stephen T. Stone (profile) says:

Re: Re: Re: Re:

Stop with the passive aggressive bullshit; straightforward aggression is far more preferable to the pathetic act of a coward who cannot express himself with honesty. And as I said: If you think you can do Techdirt better than Techdirt, do it. Mike Masnick has no problem with you copying Techdirt articles wholesale; copy this one to some other site and re-title it in a way you think is appropriate.

brad (profile) says:

Re: Re: love your work but

“when you title this stuff like this”

The title. When I want to share TD perspectives its not with people who are on the same page or in the same echo chamber, its in debate or evangelism of (usually) the same stuff that they’re putting here, but hoping their words can assist.

They can title their shit however they want, it’s their site. It’s just more likely to sway hearts and minds THAT ARE NOT ALREADY CONVINCED if they can look at the article prior to getting the feeling that the article is an attack on their beliefs. Sarcastic retorts are awesome for sharing with people who already agree, not so much for those who are on the fence.

Kal Zekdor (profile) says:

Re: Re: love your work but

This article bugged me a little, also. It has a hint of “I was right, others were wrong, deal with it.” Just a hint, something about the tone and word choice. Not enough to be an actual problem, but it comes across, at least to me, as a bit unprofessional.

I get it, it must be frustrating dealing with doublespeak and willful ignorance all the time, and vindication is a powerful feeling, but, all the same, this article left a bad taste in my mouth.

Thad (user link) says:

Re: Re: Re: love your work but

or is pretending to not understand to troll

you can use the magic of google to figure out what concern trolling is

Ah, an "I’m not a troll, you’re a troll!" immediately followed by "I’m not going to defend my position, I’m going to dismissively tell you to head to Google and do my homework for me."

Welp, you’ve convinced me. You can’t be a troll; those are things a troll would definitely never say.

Thad (user link) says:

Re: Re: Re:3 love your work but

Sure thing Thad, I should have poasted a more thoughtful analysis in response to "Concern troll is concerned".

Yes, you’re right: if someone writes a shitty, vapid post, he’s not going to get good-faith engagement in response.

The only thing you’re wrong about is the direction of causality. You’re not writing shitty, vapid posts because I wrote "Concern troll is concerned." I wrote "Concern troll is concerned" because you wrote a shitty, vapid post.

Anonymous Coward says:

Fortnite is a weird case study.
Sub par game that almost no-one played. Released a free game mode before the rush and suddenly it’s on top.
I don’t think it will stay there once the large devs start rolling out their royale modes over the next few years. Valves Dota 2 has a royale inspired mode as part of the ticket for the biggest e-sports tournament of the year. CoD is joining in later and I’m sure I saw somone else doing it too…

Anonymous Coward says:

Radio is free ,people hear new music and buy the song or go to a live concert.
Most streaming services have a free add supported
option.
Game demos on console or pc are free.
At this point the benefits of free services to attract the public are well known.
They may be ad supported or have a premium option or else have digital items you can buy as in fortnite .
Free means theres no barrier ,anyone can try fortnite
and see if they like it .
Before cable tv, most tv was free ,
supported by advertising .

Chick says:

I remember Fortnite doing this...

… when it was called Team Fortress 2. 😛

It’s been a “working” model for ages, it just didn’t reach everybody and their brother/sister before smartphones were a thing.

Sorry for not being impressed; it’s a big number, but it isn’t a “new” concept nor the first that’s made millions of dollars on optional transactions.

Anonymous Coward says:

Re: I remember Fortnite doing this...

Sorry for not being impressed; it’s a big number, but it isn’t a "new" concept nor the first that’s made millions of dollars on optional transactions.

It’s not about impressing readers. You get it, and I get it, and Mike gets it, and anyone who actually plays games gets it, but the legacy entertainment industry doesn’t get it.

For years they’ve said you can’t make money on giving something away for free (despite the fact they do free giveaways all the time), this is just a blatantly obvious example of how wrong they are.

So the point of the article is not "Wow! Hey look! A free game can make tons of money!", instead the point of the article is "Wow! Hey look! A free game can make tons of money despite legacy entertainment industries stating otherwise, trying to hold on to their dying cash cows by screwing over customers, and refusing to innovate and get with the times! They just can’t stand that someone did things better than they did."

PaulT (profile) says:

Re: Re: I remember Fortnite doing this...

More to the point – another free game making lots of money, this one just makes even more than the many other examples!

In an industry that seems set on bolting pay-to-win lootboxes on to games that cost $70 to begin with, this is something that needs to be restated, even if it’s obvious to those who aren’t.

Kal Zekdor (profile) says:

Re: I remember Fortnite doing this...

As someone who actually purchased TF2 as part of the Orange Box (I still have the actual physical disc for that, plus the soundtrack), I was actually annoyed when TF2 went free-to-play. The ensuing chaos of custom weapons and hats eventually turned me off the game entirely. I guess Valve wouldn’t care, though, they already had my money.

…I have no idea if that was on-topic or not, but there it is nevertheless.

Chick says:

Re: Re: TF2 is still fun

You should head back to give it another try, there’s been changes to the system itself that creates a bit of a “matchmaking” now. Whether that’s an improvement or not, the game itself has split into Casual and Competitive modes.

Not sure how it all works, but the game itself has still been worked on nearly all the time, by the community and Valve: rebalancing weapons and levels, new modes altogether as well as interesting new levels. With these changes it’s still a worthwhile game play, imho.

I pretty much ignore most “skin” items and “taunts”, and bought a single crate key ages ago for “premium” membership (hey, at $3 in my currency, why not?). Still fun. 🙂

John85851 (profile) says:

The music industry

Some posters are saying this idea would never work for the music industry, yet the “free to listen” model has been around for ages… it’s called THE RADIO.
That’s right- people would listen to songs *for free* on the radio and then go buy the album or go to a concert. Okay, sure, there were people who recorded songs off the radio, but a huge majority of listeners bought the music.

John smith says:

The implied argument being that piracy is no big deal because some internet site tells me to give away my work.

People don’t know what they aren’t missing. The smartest business model of all is to not try to win over freeloaders. If a free model works, that’s great, but it has nothing to do with the need to strengthen copyright protection due to internet theft of intellectual property. Don’t like it? Don’t buy it.

Anonymous Coward says:

Re: Re:

Oh please, don’t make me laugh.

There is no implied argument that piracy is "no big deal". (but there is a fair amount of studies and data that the amount of people who pirate things is a drop in the bucket compared to those that legitimately pay for them) The only argument being made, implied or otherwise, is that you can absolutely make money by offering products for free.

People don’t know what they aren’t missing.

Exactly. Which is why giving out your products/services for free is excellent marketing and advertising to get them to realize what they are missing and turn them into paying customers. How do you not understand this? Indie artists, game makers, and others do this all the time. Ever heard of Ed Sheeran? He got big because he gave his songs out for free and people pirated them. Fortnite got big because they had a solid product and gave it away for free.

The smartest business model of all is to not try to win over freeloaders.

This statement is misleading and this entire article proves you dead wrong. True freeloaders who refuse to pay for anything are going to pirate and there is jack all you or anyone else can do about it, yes. And it would be a waste to try to get them to pay for anything.

But there are other people who wouldn’t mind paying for it if they thought the price was reasonable. Additionally, there are people who wouldn’t buy or pirate it at all, who actually might become a customer due to free products.

it has nothing to do with the need to strengthen copyright protection due to internet theft of intellectual property.

What exactly needs to be strengthened? It’s already against the law to steal someone’s stuff. How much stronger do you want? What magical law is going to drastically reduce theft of intellectual property? And seriously, where is this huge crisis of intellectual property theft I keep hearing about? Because I haven’t seen it. Hmm? I’m waiting.

Don’t like it? Don’t buy it.

And there’s the rub. People like it, they want to buy it. Did you catch that? People want to buy things. Or did you miss the part where a game, given away for free, ended up make the developer hundreds of millions of dollars? It’s when the price demands are unreasonable and it’s so loaded with DRM, and complex to actually purchase and use, that a small percentage of people turn to piracy. And we are talking small here.

So, what exactly were you saying again?

Anonymous Coward says:

Re: Re:

Don’t like it? Don’t buy it.

If I have to buy it to decide whether I like it, I am going to ignore it. Other will look for a pirate copy to see if they like it.

Also, copyright is useful for big corporations, as they can take control of an artists output. However as many on the Internet have discovered, the value of a free back cataloger is in attracting fans who want more, and will pay for more to be created.

What a creative person has which is sellable is their creativity.

As corporations are not creative, what they want to sell is works, and they think that they need copyright to do that.

Anonymous Coward says:

Re: Re:

The smartest business model of all is to not try to win over freeloaders

Then why all the litigation?

Don’t like it? Don’t buy it.

I don’t, but I still have to pay money for blank media levies and RIAA clones in my country, just because they think I might be a pirate and demand my cash just to make sure. I’m already paying the price for not being a pirate. When has not buying something ever caused your precious industries to let up on me?

Anonymous Coward says:

Fairly standard

For phone games.
None of the games I have played on my phone needed a purchase to play, they were all free.
All those games did have options to buy stuff.
So, you can play a game at no cost and see if you like it, wheras if you had an upfront fee you might think not worth the risk if its not good. Plus, if free, you are less picky about the odd flaw (that you would be unhappy about if you had paid money upfront)
If I like a free game I will buy something, to give the company / devs a bit of cash & to show my support … but if I don’t like a free game I just uninstall without making a purchase.
As whether a game is good or bad is a personal opinion (I have on occasion hated some games with great reviews and loved some that are badly rated) – so upfront purchase based on reviews, adverts (that only show best features) is always a risk, so a free trial works for those of us who cannot gamble a chunk of cash on liking a game

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