When Epic Games launched Fortnite as a free-to-play title in 2017, it could hardly have imagined that it would become the runaway star that it is two years later, having amassed 250 million users and earned Epic Games over $1 billion in micro-transactions.
Fortnite world cup: the economics
Which brings us to the Fortnite World Cup, which took place last month in the 23,771 capacity Arthur Ashe Stadium in Flushing Meadows, New York. Epic games put up $30 million for prize money, took no other brand sponsorship deals to help defray the cost and charged between $50 and $150 for tickets. Even at over 20,000 tickets, the numbers simply do not add up.
And that’s only considering the $30 million in prize money. On top of this, Epic games was responsible for hiring the stadium, marketing the event and all logistics. And that’s ignoring what happened behind the scenes.
Epic has not revealed how much money they spent on the 2019 Fortnite World Cup. But alongside headline-grabbing prize money figures, they will have spent a fortune on lawyers for contracts, on back office to ensure that prize money is distributed efficiently and expediently, and on research agencies to collect and collate data about the gamers that participated and the spectators that watched the event.
Why did Epic put on the Fortnite world cup?
The simple reason is Epic used the Fortnite world cup as part of a user acquisition drive. The large costs associated with the event will come from the publisher’s marketing spend, and success for the event measured in new users and brand recognition.
Was the Fortnite world cup a success?
As with all these things, it depends on what metrics you look at. In many ways, the move has paid off as worldwide press coverage has done two things: 1) helped to drive impressions, engagement, traffic and ultimately downloads for new users and reengagement with old users and 2) helped to paint Fortnite and gaming in a positive light by telling a multitude of rags to riches stories.
However, whether brand recognition and user acquisition are at levels to justify tens of millions of dollars of spend remains to be seen. One thing’s for sure- Epic Games will spend much of this quarter trying to determine whether or not the Fortnite World Cup business model paid off.