'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 @ 2:13am

    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?

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