This web app uses cookies to compile statistic information of our users visits. By continuing to browse the site you are agreeing to our use of cookies. If you wish you may change your preference or read about cookies

close

Why Fortnite's Business Model is so successful?

Get all the answers


Fortnite’s Company Overview


Fortnite is an online video game developed by Epic Games, a leading interactive entertainment company and provider of 3D engine technology. Launched in 2017, Fortnite has rapidly emerged as one of the most popular online multiplayer games globally, drawing players from different age groups with its engaging content and creative gameplay. The game is designed around a free-to-play model, offering three distinct game mode versions that share the same general gameplay and game engine. These include Fortnite: Save the World, a cooperative hybrid-tower defense-shooter-survival game for up to four players; Fortnite Battle Royale, a free-to-play battle royale game where up to 100 players fight to be the last person standing; and Fortnite Creative, where players are given complete freedom to create worlds and battle arenas. Business Model: Fortnite's business model is primarily based on a freemium and microtransaction model. Although the game is free to download and play, it offers in-game purchases to its players. These include the Battle Pass, a seasonal subscription system featuring exclusive cosmetic items that players can earn throughout the season, and various cosmetic items such as skins, emotes, and other accessories that do not affect gameplay. Fortnite also offers a premium version of the game, Fortnite: Save the World, which players can purchase to enjoy additional features and content. The game's engaging content, regular updates, and special events keep players coming back, fostering a loyal user base that is more likely to make in-game purchases. Revenue Model: Fortnite generates its revenue primarily through these in-game purchases. The game's currency, V-Bucks, can be bought with real-world money and used to purchase the Battle Passes and cosmetic items. Despite being cosmetic and not providing any competitive advantages, these items are highly popular among players, contributing significantly to Fortnite's revenue. Additionally, Fortnite: Save the World, the premium version of the game, also contributes to the revenue. Fortnite also collaborates with popular franchises and celebrities to create themed events and exclusive items, providing another source of revenue. Partnerships with companies for advertising and promotional events also add to the game's revenue stream.

https://www.fortnite.com/

Country: North Carolina

Foundations date: 2011

Type: Subsidiary

Sector: Technology

Categories: Entertainment


Fortnite’s Customer Needs


Social impact:

Life changing: motivation, affiliation/belonging

Emotional: fun/entertainment, design/aesthetics, badge value, provides access

Functional: connects, variety, sensory appeal, informs


Fortnite’s Related Competitors



Fortnite’s Business Operations


Cross-selling:

Cross-selling is a business strategy in which additional services or goods are offered to the primary offering to attract new consumers and retain existing ones. Numerous businesses are increasingly diversifying their product lines with items that have little resemblance to their primary offerings. Walmart is one such example; they used to offer everything but food. They want their stores to function as one-stop shops. Thus, companies mitigate their reliance on particular items and increase overall sustainability by providing other goods and services.

Customer relationship:

Due to the high cost of client acquisition, acquiring a sizable wallet share, economies of scale are crucial. Customer relationship management (CRM) is a technique for dealing with a business's interactions with current and prospective customers that aims to analyze data about customers' interactions with a company to improve business relationships with customers, with a particular emphasis on retention, and ultimately to drive sales growth.

Customer loyalty:

Customer loyalty is a very successful business strategy. It entails giving consumers value that extends beyond the product or service itself. It is often provided through incentive-based programs such as member discounts, coupons, birthday discounts, and points. Today, most businesses have some kind of incentive-based programs, such as American Airlines, which rewards customers with points for each trip they take with them.

Crowdsourcing:

Crowdsourcing is a kind of sourcing in which people or organizations solicit donations from Internet users to acquire required services or ideas. Crowdsourcing differs from outsourcing because work may originate from an undefined public (rather than being commissioned from a particular, identified organization). In addition, those crowdsourcing procedures are a combination of bottom-up and top-down. The benefits of crowdsourcing may include reduced prices, increased speed, better quality, increased flexibility, scalability, and variety. An anonymous crowd adopts a solution to a task or issue, usually through the internet. Contributors are compensated or have the opportunity to win a prize if their answer is selected for manufacturing or sale. Customer engagement and inclusion may help build a good rapport with them, resulting in increased sales and income.

Digital transformation:

Digitalization is the systematic and accelerated transformation of company operations, processes, skills, and models to fully exploit the changes and possibilities brought about by digital technology and its effect on society. Digital transformation is a journey with many interconnected intermediate objectives, with the ultimate aim of continuous enhancement of processes, divisions, and the business ecosystem in a hyperconnected age. Therefore, establishing the appropriate bridges for the trip is critical to success.

Franchising:

A franchise is a license that a business (franchisee) obtains to get access to a business's secret knowledge, procedures, and trademarks to promote a product or provide services under the company's business name. The franchisee typically pays the franchisee an initial startup cost and yearly licensing fees in return for obtaining the franchise.

Freemium:

Freemium is the sum of the words free and premium and refers to a business strategy that provides both free and premium services. The freemium business model works by providing essential services for free and charging for enhanced or extra capabilities. This is a typical practice among many software firms, who offer imperative software for free with restricted functionality, and it is also a popular approach among game developers. While everyone is invited to play the game for free, extra lives and unique game features are accessible only once the player buys.

Online to Offline O2O:

Online to offline is a term (often abbreviated as O2O) used in digital marketing to refer to systems that entice customers to purchase products or services from physical companies while they are in a digital environment.

Experience selling:

An experience in the sales model describes how a typical user perceives or comprehends a system's operation. A product or service's value is enhanced when an extra customer experience is included. Visual representations of experience models are abstract diagrams or metaphors derived from recognizable objects, actions, or systems. User interfaces use a range of experience models to help users rapidly comprehend what is occurring in the design, where they are, and what they may do next. For example, a software experience model may depict the connection between two applications and the relationship between an application and different navigation methods and other system or software components.

Ecosystem:

A business ecosystem is a collection of related entities ? suppliers, distributors, customers, rivals, and government agencies ? collaborating and providing a particular product or service. The concept is that each entity in the ecosystem influences and is impacted by the others, resulting in an ever-changing connection. Therefore, each entity must be adaptive and flexible to live, much like a biological ecosystem. These connections are often backed by a shared technical platform and are based on the flow of information, resources, and artifacts in the software ecosystem.

Virtual reality:

AR/VR is the fourth significant platform change (after PC, web, and mobile). First, CEOs must choose how to play. Business models are determined by installed bases, use cases, and unit economics; there is no one-size-fits-all answer; each situation is unique, and developers must do market research and analysis before making a choice. Relying on advertising-income is a handy strategy for unknown businesses or newcomers to the market. It allows them to use their prior expertise with mobile and online ad campaigns.

Revenue sharing:

Revenue sharing occurs in various forms, but each iteration includes the sharing of operational gains or losses amongst connected financial players. Occasionally, revenue sharing is utilized as an incentive program ? for example, a small company owner may pay partners or colleagues a percentage-based commission for recommending new clients. Occasionally, revenue sharing is utilized to share the earnings generated by a corporate partnership.

Micropayment:

Micropayments are financial transactions involving a tiny amount of money that is frequently conducted online. While micropayments were initially intended to apply minimal amounts of money, practical systems allowing less than one dollar transactions have met with little success. One impediment to the development of micropayment systems has been the need to keep transaction costs low, which is impracticable when transferring such tiny amounts, even if the transaction charge is just a few cents.

Two-sided market:

Two-sided marketplaces, also called two-sided networks, are commercial platforms featuring two different user groups that mutually profit from the web. A multi-sided platform is an organization that generates value mainly via the facilitation of direct contacts between two (or more) distinct kinds of connected consumers (MSP). A two-sided market enables interactions between many interdependent consumer groups. The platform's value grows as more groups or individual members of each group use it. For example, eBay is a marketplace that links buyers and sellers. Google connects advertising and searchers. Social media platforms such as Twitter and Facebook are also bidirectional, linking consumers and marketers.

Technology trends:

New technologies that are now being created or produced in the next five to ten years will significantly change the economic and social landscape. These include but are not limited to information technology, wireless data transmission, human-machine connection, on-demand printing, biotechnology, and sophisticated robotics.

User design:

A client is both the manufacturer and the consumer in user manufacturing. For instance, an online platform could offer the client the tools required to create and market the product, such as product design software, manufacturing services, or an online store to sell the goods. In addition, numerous software solutions enable users to create and customize their products to respond to changing consumer requirements seamlessly.

Disruptive trends:

A disruptive technology supplants an existing technology and fundamentally alters an industry or a game-changing innovation that establishes an altogether new industry. Disruptive innovation is defined as an invention that shows a new market and value network and ultimately disrupts an established market and value network, replacing incumbent market-leading companies, products, and alliances.

Online marketplace:

An online marketplace (or online e-commerce marketplace) is a kind of e-commerce website in which product or service information is supplied by various third parties or, in some instances, the brand itself, while the marketplace operator handles transactions. Additionally, this pattern encompasses peer-to-peer (P2P) e-commerce between businesses or people. By and large, since marketplaces aggregate goods from a diverse range of suppliers, the variety and availability are typically greater than in vendor-specific online retail shops. Additionally, pricing might be more competitive.

Subscription:

Subscription business models are built on the concept of providing a product or service in exchange for recurring subscription income on a monthly or annual basis. As a result, they place a higher premium on client retention than on customer acquisition. Subscription business models, in essence, concentrate on revenue generation in such a manner that a single client makes repeated payments for extended access to a product or service. Cable television, internet providers, software suppliers, websites (e.g., blogs), business solutions providers, and financial services companies utilize this approach, as do conventional newspapers, periodicals, and academic publications.

Embed code:

x
Copy the code below and embed it in yours to show this business model canvas in your website.