'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 @ 6:59am

    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.

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