'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. icon
    PaulT (profile), 28 Jun 2018 @ 1:52am

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


    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?

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