Don’t pay, do play (pay if you want to)

In anticipation of our upcoming emerging technologies class, I wanted to share my recent gaming experience playing Fortnite. I started with downloading the app to my iPhone and kept getting eliminated within the first minute of play. Then I discovered the game is also free to play on PlayStation. I tried this, found the game experience better, though still was quickly eliminated.

My wife then got involved, who made a point to study what other players were doing in viewer mode. Turns out the game requires deep strategy rather than simply shooting through it. Winners are builders in the game, with players building elaborate castles of various materials in the sky.

In fact, there’s a broad audience spectating Fortnite matches, with one superstar player who goes by the moniker “Ninja” earning an eye boggling $500K per month. While this is an extreme, there are many more players who play the game and join expert squads in the hopes to earn some scratch.

http://time.com/money/5206181/3-ways-to-make-money-playing-fortnite-the-free-online-game-thats-gone-viral/

Beyond Fortnite, E-sports are seeing the rise of a new professional athletes across games, with Superdata giving the industry a $1.5 billion valuation in 2017 with a clear trend showing growth in North America.

https://www.pcgamer.com/esports-was-worth-15-billion-in-2017/

There are two principle ways players monetize their skills:

1) Prize money from winning tournaments

2) Streaming their winning exploits over the internet

  

The first path is straightforward, though any pro tennis player will tell you the big bucks don’t come from the prize money, rather from the strength of your audience vis-a-vis sponsorships. In E-sports land, players live stream and archive their games and get paid by streaming services based on the size of their audience. The main streaming platform is Twitch (https://www.twitch.tv/), which is essentially YouTube dedicated to the gamer community.

So we’ve established that astute players can make money. Epic Games, the creator of Fortnite, makes money via V-bucks, which are in-game currency that players can buy. V-bucks allow for greater customization of the game experience, while also allowing the game publisher to offer an ad free game at zero cost in its most basic version. Plus, they now have a platform of numerous users that benefits from network effects.

I personally was skeptical about E-sports emerging as a category, though watching one of the superstar players break dance and build elaborate structures all while decimating their opponents turned out to be quite enthralling. This seems to open all sorts of marketing opportunities for sponsorship, besides the opportunity around controlling the hubs, whether PlayStation, Xbox, YouTube, Twitch, the games themselves or e-sports leagues.

I’m excited to see how the space develops.