ISS 210 Society, the Individual, & Video Games (W1)

V I D E O G A M E S

‘Fortnite: Battle Royale’ Success Signals Mobile

Gaming’s Future The free battle royal game is seeing revenue growth, thanks in

large part to mobile in-game purchases

Epic Games / Morning Consult illustration by Czarina Divinagracia

I N T E L L I G E N C E N E W S

B Y J O A N N A P I A C E N Z A May 10, 2018

Nearly half (45%) of all video gamers said they’re playing

more on their smartphone than they were three years

ago.

By comparison, 28% of gamers said they’re playing

more on gaming consoles.

Mobile gaming has gone from making up just 9% of the

gaming industry’s revenue in 2012 to constituting 30%

of it in 2017.

The idea is simple enough: Be the last

person standing. On an island. Where

everyone is trying to kill each other.

This is the concept behind Epic Games

Inc.’s “Fortnite: Battle Royale,” a campy

survival video game that has swept the

country.

“It is basically a phenomenon,” said

Randy Nelson, head of mobile insights at

the market analyst firm Sensor Tower, in

an interview May 2. He pointed to teens

and young adults as the game’s loudest

audience.

“Fortnite: Battle Royale” has been

available for fewer than eight months

and already has a player base of at least

45 million, bringing in 3.4 million

concurrent players for one epic day in

February. Even Marvel Studios LLC is

getting in on the action, featuring

“Avengers: Infinity War” villain Thanos in

the game for a limited time.

M C / B R A N D S : S U B S C R I B E

Get the latest news, data and insights on marketing,

communications and media.

S I G N U P

“Fortnite: Battle Royale,” currently

available on iOS, PC, PlayStation 4 and

Xbox One, is seeing tremendous growth,

earning $223 million across all platforms

in March alone, a 73 percent jump from

February, according to the market

research company SuperData Research

Holdings Inc. (Privately held Epic Games

does not report revenue figures and

declined to comment for this story.)

This is thanks in large part to its success

on mobile: Sensor Tower estimates that

the game has brought in $50 million

since its invitation-only launch March 15

on the iOS platform, which was expanded

to all users of certain iPhones.

“This is definitely the largest mobile

sensation since Pokémon Go,” Nelson

said.

Such revenue is especially eye-opening

since “Fortnite: Battle Royale” is free. Its

revenue comes from in-game purchases,

which are purely cosmetic and do not

improve odds to win.

The runaway success of “Fortnite: Battle

Royale” is impressive on its own, but

experts say the way Epic has embraced

mobile gaming is blazing a trail for the

rest of the industry. Not only does mobile

lower the barrier of entry, but its

platform allows for more impulsive,

emotional purchases — ideal for in-game

purchases.

“Fortnite: Battle Royale,” released in

September 2017 as a game mode for the

larger sandbox survival game “Fortnite,”

has a straightforward structure: Players

are dropped onto an island, and the last

person standing wins. Weapons and

other goodies are scattered about, and

players can build structures from found

or harvested materials. There’s also a

storm circling the island that

progressively shrinks the usable game

space and reduces the health of any

players caught inside it.

The game imitates the “battle royal”

mode of another game —

“PlayerUnknown’s Battlegrounds,”

commonly known as PUBG — but has

crushed its inspiration in terms of mobile

revenue: “Fortnite: Battle Royale” earned

$3.7 million in its first week on iOS

outside of China, according to Sensor

Tower estimates, compared to PUBG’s

$700,000.

Epic Games made a few important

changes in its adaptation of PUBG. The

first was making “Fortnite: Battle Royale”

free.

“If you are a novice, then that free-to-

play structure is going to be a more

attractive one,” said Shira Chess, an

assistant professor in entertainment and

media studies at the University of

Georgia, in an interview May 1.

Mobile, as a platform, also blows open

entry points for potential players.

“It’s no longer necessary to have a $300

console system — or even a $150 portable

system,” she said. With smartphones, she

said, “it’s something that you already

have; it’s something that you see every

day; it’s something that you’re

constantly playing with in some way or

another.”

Mobile gaming is on fire. It’s gone from making

up just 9 percent of the gaming industry’s

revenue in 2012 to constituting 30 percent of it

in 2017.

Gamers also report that they’re playing more on

mobile, per Morning Consult polling. Nearly half

(45 percent) of all video gamers said they’re

playing more on their smartphone than they

were three years ago.

By comparison, 28

percent said they’re

playing more on

gaming consoles.

Even gamers who

prefer playing on

consoles were just as

likely to say they are

playing more on

mobile as they are on

their console. The April 26-May 2 poll was

conducted among 4,401 U.S. adults, with a

margin of error of 1 percentage point.

“Mobile gaming is as successful as it is because

it is something that can be done in interstitial

moments,” Chess said. “It’s a way to integrate

play into your life if you don’t typically have a

lot of time for play.”

IPhone users in the United States spent an

average of $58 on in-app purchases in 2017, per

a Sensor Tower analysis, a 23 percent jump from

2016.

Most of that money was dedicated to games:

$36, or 62 percent of the total $58 average.

For “Fortnite: Battle Royale” players, these in-

app purchases are just cosmetic: “skins” that

change one’s

appearance or

“emotes” that allow

avatars to dance, for

example.

“These are things that

are not necessarily tied

to the mechanics of the

game themselves but

something that could

be related to the player’s self-identity,” said D.

Yvette Wohn, an assistant professor at the New

Jersey Institute of Technology who specializes

in human computer interaction and social

technologies.

The currency in “Fortnite: Battle Royale” is

called V-Bucks, and 1,000 V-Bucks cost $10.

Skins and outfits cost about 800 to 1,500 V-

Bucks, and emotes are about 200.

“Especially if you’re spending a lot of time in

the game, your character in the game becomes a

part of your identity,” Wohn said in an interview

May 2. “So why wouldn’t you want to spend

money on clothes? Because that’s what you do

offline, as well.”

Another element that experts said “Fortnite:

Battle Royale” does well, that other games can’t

seem to guarantee, is a seamless sync of in-

game purchases. Items bought on the mobile

version, which is an exact replica of the game on

other platforms, instantly show up on players’

accounts on other platforms, to the delight of

heavy multiplatform gamers.

But relatively few are opening up their

wallets to deck out their avatars.

“The truth is most people don’t make in-

app purchases, and it’s the vast majority

of people who choose to play games for

free,” Wohn said.

Indeed, just 7 percent of mobile gamers

make up 66 percent of the industry’s

total revenue, according to a December

2017 report from the research firm

Electronic Entertainment Design and

Research Inc.

More than half of mobile gamers spent

nothing on their games.

To be sure, several experts predicted

these proportions could shift as mobile

gaming grows and as companies devote

more effort to understanding new

players’ psychology of buying.

Smartphones are a company’s dream for

such purchases: A study published in

September in the Journal of Retailing and

Consumer Services found that

smartphones could encourage more

impulsive in-game mobile purchases.

Liraz Margalit, psychologist and head of

research at the analytics company

Clicktale Ltd., said consumers tend to

view smartphones in a more emotional

way than, say, desktop computers.

“When you hold your smartphone in your

hand, it’s like an extension of your body.

It’s like part of you,” she said during an

interview May 1. “The device is perceived

as an emotional device, so the purchases

are more emotional purchases.”

RELATED: Parents, Not Companies, Are

Blamed for Smartphone Addiction Among

Youths

Most in-game purchases in “Fortnite:

Battle Royale” are only available for a

limited time, encouraging impulse

purchasing.

Experts also said the game’s aesthetics,

paired with its lowered barrier of entry

on free-to-play mobile, could open up

the game to new demographics.

“Fortnite: Battle Royale” is colorful and

cartoonish. Player avatars are diverse in

race, gender, age and size. Some are even

otherworldly or bizarre, but not

intentionally frightening.

There’s a sort of “magical realism” about

the game, said Garrison LeMasters, a

lecturer at Georgetown University’s

communication, culture and technology

program. Players kill players, yes, but

there’s no blood or gore.

“The emphasis is certainly not on killing,

even though that is exactly what

happens,” he said. “I think that’s

probably appealing to a lot of people that

have found other first-person shooters a

bit of a downer.”

RELATED: Why the Public Overlooks and

Undervalues Tech’s Power

This has the potential to appeal to a

more female audience, experts said, and

these players are already on mobile.

Nearly two-thirds (65 percent) of women

ages 10-65 in the United States play

mobile games, and 49 percent of mobile

gamers are women, according to a Google

Play and Newzoo white paper released in

December 2017.

Women are also more likely to prefer

smartphones as a gaming platform than

men are: 64 percent vs. 38 percent.

But men are slightly more likely to spend

money on the mobile platform: 55

percent of men spend money on mobile

games, compared to 43 percent of female

gamers, according to the Electronic

Entertainment Design and Research

report.

All gaming industry workers have their

eyes on “Fortnite: Battle Royale” right

now, several experts said. And they’re

paying close attention to its free-to-play

mobile success. The game’s Android

version is in the works, and Sensor Tower

predicts that it could take in more than

$3 million per day on mobile when the

Android user base reaches a level

comparable to that of the iOS version.

This business model “is, at least for the

moment, the future,” LeMasters said.

RELATED: The Brands That Stand Out

Among Men, Women

Joanna Piacenza Joanna is a senior

reporter for

Morning Consult.

B R A N D S P O L L I N G T E C H

Intelligence News About Contact Careers