'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?

Filed Under: business models, differentiation, economics, fortnite, free, free to play, scarcity

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  1. identicon
    Anonymous Coward, 27 Jun 2018 @ 2:37pm

    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.

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