from the competing-with-free dept
For years — years! — Techdirt has been a place that has argued that offering a product or service for free, where that made sense, could actually be a fantastic business model. While there are lots of examples of that sort of thing these days, you have to understand that this concept was met with derision and scorn by all kinds of industry folks big and small. Some said anyone offering something for free had no clue how to run a business. Others even more absurdly claimed that there was literally no way to compete with “free.”
Well, the video game industry has long claimed to have a “free” problem when it comes to piracy. The problem with combining those claims with claims that you can’t compete with that sort of thing is that the success stories are there and you don’t exactly have to look hard for them. Back in 2018, we talked about Fortnite, a free game that makes its money in all other sorts of ways. And by “its money” I mean that it was making $300 million per month. But then there were claims that all of this was some flash in a pan rather than anything sustainable. The problem with that is that, thanks to the trial just kicking off between Apple and Epic, internal Epic documents indicate that Fortnite made the company $9 billion over the course of two years.
Today, the trial between Epic and Apple finally began after nearly nine months of legal filings and pre-trial hearings. During the court proceedings, new documents surfaced providing more data on how these companies operate. For example, we now know that Fortnite made $9,165,000,000 in two years.
That huge number comes from a financial board presentation report that Epic created in January 2020. In this document, Epic stated Fortnite made just over $5.4 billion dollars in 2018. The following year, the popular battle royale game pulled in $3.7 billion.
This is not someone competing with free; this is someone dominating piracy into total irrelevance. As Kotaku points out, it’s worth comparing these numbers to numbers spent elsewhere in the entertainment industry. Microsoft bought Bethesda for $7.5 billion, less than what this one game made. And, yes, Fortnite is one of the most wildly successful games of all time. But that isn’t really the point. The point is that there are business models that make “free” work and this is the shining example of that being done.
Any whining from the industry about how this one example isn’t fair is just that: whining. It’s on business leaders to innovate into new business models that work in the modern era. Epic has figured out how to do that. And not just with Fortnite, either. We already discussed how Epic is using free video game giveaways in the Epic Store to build up the adoption of that platform. Despite the losses the company incurred with this practice, Epic appears to be super happy about it all.
There needs to be more of this, even as similar business models appear to be picking up speed. More success for the industry by adopting a model where piracy is simply taken out of the equation.