How the Video Game ‘Fortnite’ Became a $2.4 Billion Business

It was just another game. Now it’s a money-minting global phenomenon. Here’s the story behind its rise and the economy it spawned.

How the Free Video Game ‘Fortnite’ Became a $2.4 Billion Business

It’s 2023, five years after Thanos’s “Snapture” disintegrated half of all living things in the universe. Earth reels from the loss. Houses are falling apart. Trash overflows its bins. Citi Field, former home of the New York Mets, appears unkempt and abandoned. It looks like Major League Baseball, a foundation of American life for more than 100 years, no longer exists.

“Fortnite” does, though.

Not only does the most popular video game of present day still exist in the 2023 of “Avengers: Endgame,” it’s thriving. It’s the go-to pastime for big names of the Marvel Cinematic Universe. Thor and Korg play! And it’s still populated with foul-mouthed, pickaxe-wielding menaces. (Don’t worry, the “God of Thunder” can handle the likes of “Noobmaster69.”)

Fiction? Of course. A fantasy? When it comes to the future of “Fortnite,” perhaps not. Time will tell whether players will rapture the game from their consoles, phones and PCs in the coming years. But right now, in 2019, the coveted cross-promo with the Avengers shows that “Fortnite” is arguably the most powerful pop culture force on the planet, or at least a shared No. 1 with the MCU.

How did we arrive at such a moment? How did “Fortnite” come to occupy a place in the inner circles of global popular culture, a position that the game’s creator, Epic Games, has leveraged into a behemoth that in 2018 earned an estimated $2.4 billion? And what comes next?

It’s a story of superhero crossovers, yes, but also of fanboy musicians, world-class athletes, litigious dancers, confounded parents, potent human psychology, hardball business tactics, around 250 million total registered users and, of course, piles and piles of money.

The Phenomenon Begins

“Fortnite: Battle Royale” — that’s the game’s full name, but almost everyone shortens it to “Fortnite” — debuted Sept. 26, 2017, with little initial indication it’d become a money-minting sensation. Its core game play isn’t innovative. It’s a battle royale, a genre that had been established for several years before “Fortnite” arrived on the scene.

Here’s the core “Fortnite” approach to the genre: One hundred players (either playing solo, in duos or in squads of four, depending on the mode) jump from a flying bus and soar in their gliders onto an abandoned island, where they land in places with names like Tilted Towers and Salty Springs and Pleasant Park. Once players hit the ground, they use their pickaxes to mine for wood, metal and brick, which are used to build shelters and other structures. Players also scour the land for caches of weapons, which they use to destroy others’ structures and, of course, other players (it’s bloodless, cartoon-like carnage, at least compared to a lot of other video game violence).

Another critical element: A deadly storm with a hole at its center rages on the island, a hole that gets smaller every few minutes, forcing players closer and closer together to battle. The last surviving player wins. The common description of “The Hunger Games” meets “Minecraft” is apt. So, yes, it’s well-worn virtual ground.

“They strapped themselves to an evolving trend in game mechanics that was proven to sustain players for a long time,” said Adam Telfer, writer of mobilefreetoplay.com, a mobile game design consultancy. “They took this game play and applied it to an audience that hadn’t been exposed to it before. The ‘Fortnite’ audience is younger and broader than the predecessors in battle royale, such as ‘Playerunknown: Battlegrounds.’”

The game launched for free on Windows, Mac, Xbox and PlayStation that summer and, unlike some other battle royale games, players could play against each other on almost any platform. Free video games also weren’t unheard of in 2017. “Fortnite,” like many other video games, planned to make its money via in-game purchases. However, Epic Games didn’t sell ways for players to be better at “Fortnite” or ways for them to advance in the game; it stocked its shop with cosmetic items. “Their monetization is very light and doesn’t impede in the gameplay whatsoever,” said Telfer. “It’s fully optional.”

For instance, players’ avatars in “Fortnite” wear skins, outfits that have no performance value. They just look great. To have your avatar wear a skin beyond the one you’re given to begin the game, you generally have to buy it (in some cases, you can earn skins through game play). The basic unit of currency within the game is a “V-Buck,” which trades at approximately $1 for 100 V-Bucks, with a minimum purchase of 1,000 V-Bucks for $9.99. A common skin costs around 800 V-Bucks, or $8, while the “legendary” skins go for up to 2,000 V-Bucks, or $20.

The signature items in the item shop, however, are emotes, dance moves you can make your avatar perform when you’re bounding across the island, or after you’ve taken someone out with a high-skill no-scope shot. One emote, dance moves, aka the default dance, is given to all players. Common emotes cost 200 V-Bucks, or $2. More prized emotes cost 800 V-Bucks, or $8.

'Fortnite' Grows

It all initially added up to…nothing extraordinary. During early 2018, The Verge described “Fortnite” as “quietly chugging along.” It was no “Grand Theft Auto” or any other video game that’s made an insane amount of money. But Epic was making other changes, including rolling out a Battle Pass, which features a series of challenges and special items players could unlock during one of the game’s roughly 10-week seasons. The cost: 950 V-Bucks, or $9.50. For instance, the popular “Take the L” emote, in which players shape their thumb and index finger into an L and raise it to their forehead to taunt other players, bouncing side-to-side like a drunken clown, was exclusive to the game’s Season 3 Battle Pass.

“The Battle Pass…gives players access to roughly 100 pieces of pre-selected cosmetic items, or roughly $350 worth of value if you were to purchase each item individually,” said Telfer. “However, in order to unlock these 100 items, the player must complete additional tasks in game. Not only does this offer the player huge value, but it also creates new interesting ways for players to be playing.”

From a business perspective, Telfer says, Epic Games has emphasized conversion of a large audience to spend a little bit of money over the conversion of a small niche of their audience to spend more money. According to SuperData’s 2018 Year in Review, 34 percent of “Fortnite” players buy the Battle Pass “regularly.” Wedbush Securities video game industry analyst Michael Pachter said “Fortnite” sold 5 million Battle Passes the first day they were for sale during Season 3. Total one-day Battle Pass revenue: $47.5 million.

Epic Games also began refining its strategy of a constantly evolving the island environment from season to season, as well as during individual seasons.. It’s not just a game; it’s a narrative. “Epic Games [has] been very smart with how they have introduced little nuggets of story,” said streaming expert Chris Slight. For instance, Slight added, at one point in 2018 “a missile was launched into the sky of the game world, which cracked it open, leaving...a glass-like crack in the skybox. What could this mean?” Or more recently, meteors destroyed Titled Towers, one of the longtime favorite spots on the island map, leaving people speculating what comes next. Such mysteries and other narrative story elements kept players curious and coming back for more.

Within a few months, “Fortnite” went from a peak of 60,000 concurrent players to 3.4 million concurrent players in February 2018.

Still, at that point, it was a phenomenon mostly confined to the gaming world — until it got an unexpected boost from The North.

God’s Plan?

On March 15, 2018, during the early hours of a freezing Toronto morning, Drake picked up a PlayStation 4 controller. The Canadian pop superstar was taking a break from recording an album, and he was doing what he liked to do to get away from the studio: He was playing “Fortnite.”

We know this because at 12:57 a.m. Drake tweeted: “playing fort nite with @ninja.”

That moment marked a turning point in the game’s elevation to global phenomenon.

Ninja, aka Tyler Blevins, is a popular streamer — that is, a person who plays video games and broadcasts his on- and off-screen actions to anyone who wants to watch him do it. Top-level streamers like Ninja charge for the privilege. Drake’s tweet trended globally, without much help from residents of the U.S. “Remember, the tweet was made just after 10 p.m. PT, so most of those tweets and retweets happened while the US was asleep,” wrote CNET’s Daniel Van Boon. “Most of those tweets and retweets were glorious.”

People flocked to Twitch, too, to watch Drake and Ninja — and NFL player/gamer JuJu Smith-Schuster and rapper Travis Scott, who rounded out the squad — play and talk about pizza. (For the record, Drake is — wrongly — pro-pineapple as a pizza topping.)

Before playing with Drake and friends, Ninja attracted around 90,000 viewers per live stream, according to the video game website Kotaku. After Drake’s tweet, “this story made mainstream news,” said Slight, who added that millions of people watched the stream at one time or another. Twitch confirmed Ninja’s stream reached more than 635,000 concurrent viewers at its peak.

Sure enough, Epic Games’s business was booming. In March, the company announced “Fortnite” had surpassed battle royale game “Playerunknown: Battlegrounds,” earning $126 million in sales in February 2018. In April, a mobile version of the game for iOS debuted, making an estimated $15 million during its first three days on the platform.

Epic Games had the wind at its back, but it wasn’t content. As The Verge put it, “Epic wasn’t afraid to mess with the formula in the hopes of finding the next big thing.” A first crossover event with Marvel and “Avengers” in May 2018 pegged to “Avengers: Infinity War” allowed players to compete against and sometimes play as the Infinity Gauntlet-wearing, finger-snapping baddie Thanos.

The company also plowed prize money into competitions, incentivising “Fortnite” players to spend even more time playing the game. The company spent $100 million in 2018 on prize money for competitive tournaments, and has done the same for 2019. The Fortnite World Cup, which takes place July 26-28, 2019 in New York City, will have a prize pool of $30 million. Individual qualifiers, which are open to anyone, have prize pools of $1 million.

Great “Fortnite” players can make a lot of money playing the game in sanctioned competitions under Epic Games’s control. But the game’s cultural impact — in our famously fractured and polarized world it is, arguably, a cornerstone of the elusive monoculture — has spilled into the real world.

'Fortnite' in the World (Cup)

It was early evening in Moscow on July 15, 2018, and Antoine Griezmann was on the spot. Thirty-eight minutes into the World Cup final, with an estimated 1 billion people watching, France’s star forward left-footed a penalty kick low and hard past Croatia’s goalkeeper Danijel Subasic. Griezmann’s goal gave his team a 2-1 lead, leaping Les Bleus ahead in their quest to win the world’s most coveted trophy in team sports.

Subasic pushed himself up from the grass, the agony of conceding a critical goal radiating through his lanky, deflated body. And during that early evening moment in July, a moment he’d worked his whole sporting life to achieve, what weighed on the hero Griezmann’s mind?

“Fortnite.”

Griezmann ran toward the end line. He stopped, shaped his thumb and index finger on his right hand into an L and raised it to his forehead. The internet lit up at Griezmann’s performance of the “Fortnite” “Take the L” emote. Tweets were tweeted. GIFs were made. Griezmann’s celebration, which some called “disgusting” because of its taunting nature, became a potent symbol of Fortnite’s crossover into the real world.

Moscow’s not the only place the line between the game and reality has blurred, stirring cultural conversation. A few other high-profile examples:

In September 2018, on “Saturday Night Live,” host Adam Driver played a single dad who awkwardly wants to learn how to play so he could bond with his “Fortnite” loving 11-year-old son. “My son plays with his step-father Rick,” says Driver’s character. “And I’d like to be better than Rick as soon as possible.”
Google’s Frightgeist tracked “Fortnite” as the most-popular Halloween costume inspiration for 2018, boxing out Spider-man and unicorns. That explains all the little Drifts and Brite Bombers who knocked on your door.
In November 2018, “Fortnite” launched NFL-themed skins, joining with the most popular sports league in the U.S. Price for a skin: 1,500 V-Bucks, or $15.
On December 31, 2018, Ninja took his talents to New York City’s Times Square for a 12-hour livestream, competing directly with traditional network NYE programming from the Big Apple.
In February 2019, Marshmello put on a concert within “Fortnite.” Epic Games reported a virtual crowd of 10.7 million for the event.
Recipes for Durr Burgers, burgers from the fictional burger chain on the island in “Fortnite,” abound.

This persistent, worldwide visibility of “Fortnite” has created broader economic opportunities.

The Extended ‘Fortnite’ Economy

On October 11, 2018, during a warm, sunny day in Los Angeles, Ellen Degeneres picked up as Xbox controller. The comedian and talk show host was doing what millions of people around the world were now doing: She was playing “Fortnite.”

Like Drake, she was playing with Ninja.

Ninja had by that point become a full-blown star, crossing over enough to get invites to guest on daytime television, and a symbol of the money to be made in the extended “Fortnite” economy. A big part of the story of Ninja’s stream with Drake, says Slight, was just how much money Ninja made during that one stream. Over 90,000 people subscribed to Ninja’s channel because of the stream, which costs anything from $4.99 to $24.99. Or it’s free if you're an Amazon Prime member. “It was estimated Ninja would have earned over $250,000 in revenue from this stream alone,” Slight said. “Anyone seeing this, combined with how bright, approachable and free this game was, combined with the celebrity factor is going to be intrigued.”

Ninja told CNN that he made almost $10 million in 2018 via his Twitch streaming and his YouTube channel. When Degeneres found out how much Ninja was making, she invited him on her show so he could teach her how to play. “This morning I went out and I bought myself an Xbox and I’m gonna be rich,” Degeneres said, joking before Ninja gave her a lesson and earned himself some extra publicity. The symbiotic moment enhanced the game’s reach even more.

Ninja’s the breakout “Fortnite” player — his Twitch stream was watched for 218 million hours in 2018 according to SuperData, more than the second and third most popular streamers combined — but he’s far from the only one. Streamers abound on Twitch, and “Fortnite” videos are popular on YouTube. Two other streamers in the SuperData top 10 on Twitch — dakotaz (47 million) and Tfue (43 million) — are “Fortnite” players. “Fortnite” streaming remains strong in 2019, with 23.9 million hours of streaming in the first quarter alone.

Some players, however, are using their talents in other ways. For instance, there’s Climate Fortnite, which Wired describes as “a channel full of climate scientists who discuss issues of global warming while playing Fortnite on Twitch, hoping the platform’s massive reach will get their message in front of more eyeballs.”

Others are less benevolent but still inventive. Parents are paying to have their kids tutored at “Fortnite,” with lessons running from $15-$35 an hour, according to Business Insider. People can also pay to learn the “Fortnite” dance emotes. In Fall of 2018, David Lloyd Clubs in the UK launched an “Emote Royale” class (included in its $71 monthly membership fee), where students can learn 12 different dances featured in “Fortnite,” including “The Floss,” “Orange Justice” and Griezmann’s favorite, “Take the L.”

And some people are into “Fortnite” for the money laundering opportunities. An investigation by The Independent and the cybersecurity firm Sixgill concluded that criminals create new “Fortnite” accounts and buy V-Bucks with stolen credit cards. They then sell the accounts loaded with V-Bucks on eBay or the dark web, or via another source. More than $250,000 worth of “Fortnite” items were sold on eBay during one 60-day period in 2018, according to Sixgill.

Of course, the money made outside of the game by money launderers and streamers and dance instructors is peanuts compared to Epic Games’s take. And Epic Games is acting to protect and expand its profits. Some say at times they’re doing it unethically and perhaps unlawfully, including Russell Horning.

Russell who? You may know him better as Backpack Kid.

The Battles Ahead

Backpack Kid’s viral fame arrived in a deceptively simple package. On August 18, 2016, he slipped his arms through the straps on his backpack and started swaying his arms side-to-side across his body, moving his hips back-and-forth. He posted the video of his new dance move to Instagram, which soon became a viral sensation. It was so popular and prevalent that less than a year later, in May 2017, Backpack Kid found himself performing the dance he claims he created and popularized with pop star Katy Perry on “Saturday Night Live.”

Backpack Kid’s dance is now commonly known as “The Floss,” which, since its debut in “Fortnite” in December 2017 as part of the Season 2 Battle Pass ($9.50), has been one of the game’s most popular emotes.

Here’s the problem, according to Backpack Kid: Epic Games hasn’t paid him a penny for what he believes is his property.

Backpack Kid isn’t the only one feeling ripped off by “Fortnite” and Epic Games. Alfonso Ribeiro, creator of “The Carlton” dance during his time on “The Fresh Prince of Bel-Air,” and rapper 2 Milly, creator of the “Milly Rock” dance, also have seen what they claim are their creations used in “Fortnite” without payment. Each of these artists has sued Epic Games for exploiting and appropriating their work.

The suits are currently in a holding pattern. Pierce Bainbridge, the law firm representing the artists, recently withdrew the suits, pending a ruling from the Copyright Office. In a press release, Pierce Bainbridge stated it plans to refile the suits in the future, and to “vigorously fight for our clients' rights against those who wrongly take their creations without permission and without compensation.”

Some say the law is on Epic Games’s side, because individual dance moves, unlike choreography, are not protected by copyright laws. But the company may be losing in the court of public opinion. Why shouldn’t these artists get paid? We’ll see how it turns out, but Epic has already shown its willingness to throw its weight around, not just against dance sensations. They’ve even done so against a fellow global powerhouse, Google.

Because of the widespread popularity of “Fortnite,” when Epic Games decided in August 2018 to release a mobile version for Android, it didn’t do so through the Google Play store; it released it directly to consumers without the app-store middleman, cutting Google out of the 30 percent revenue sharing. Epic’s keeping that money for itself. “This sets a precedent,” said Slight. “‘Fortnite’ is the biggest game in the mobile space and it can do as it pleases.”

Other industries are paying attention to Epic’s power moves. . For instance, Netflix believes “Fortnite” is among its top competitors. Netflix’s 2019 letter to shareholders included this line: “We compete with (and lose to) Fortnite more than HBO.” Polygon broke it down like so: “In its quarterly report, Netflix made clear that ‘consumer screen time’ is its most valuable metric, and that ‘Fortnite’ — just one of endless options for plugged-in audiences — offers the stiffest competition.'' Says Telfer of mobilefreetoplay.com, “Fortnite is a phenomenon. There are very few games in our lifetime that will reach this level.”

So where does “Fortnite” go from here? Superdata research reports “Fortnite” posted year-over-year growth of 7 percent in March 2019, but projects the game “will face tough comparisons going forward as it’s unlikely to replicate last year’s meteoric rise during Spring and Summer 2018.”

Telfer elaborates: “It's unlikely that the success of ‘Fortnite’ will continue at the level it is at now, but … it's highly likely they will retain a large amount of their core audience for years to come,” he said. “If they continue to keep the game [as] fresh as they are, they will be able to retain [players] for a long time. The players that have just come to play just because it’s the ‘new hot thing’ will most likely fade, but ‘Fortnite’ will likely retain a massive DAU [daily active users] for years to come.”