'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. This comment has been flagged by the community. Click here to show it
    Anonymous Coward, 27 Jun 2018 @ 2:01pm

    "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.

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