Fortnite's Monetization Secrets — Full Breakdown & Transcript

[00:00] So, back at the beginning of February 2019, DJ Marshmallow performed a live concert inside Epic Games' online gaming sensation, Fortnite, and I have since then been informed via numerous breathy-sync pieces that Fortnite is no longer merely a game,

[00:16] but is now a content delivery platform experience. And so, logically, the only sensible thing for me to do is to get in on this and pivot entirely to Fortnite.

[00:30] Welcome to the brand new Folding Ideas All-Fortnite Digital Studio.

[00:50] It is not only a digital studio because I'm producing digital content, but it is also literally a digital studio. So it is double digital. And this arm-waving emote is the only meaningful animation I've got,

[01:06] and there's nothing available that really looks like talking. So I guess it's what I'm going with for now. So when you see me doing this, it means I'm talking to you.

[01:19] It took me like 20 hours to unlock this. Fortnite, developed by Epic Games, is an online four-player cooperative base-building tower defense shooter game. Released as early access with in-game purchases in July 2017,

[01:32] the game has been utterly eclipsed by its free-to-play sub-game Fortnite Battle Royale launched in September 2017. Battle Royale, a format popularized by PlayerUnknown's Battlegrounds and originally inspired by the 2000 Japanese horror film Battle Royale,

[01:47] is a last-player standing free-for-all where 100 players are dropped onto an island with an ever-shrinking zone of engagement and left to scrounge resources, build defenses, and fight until only one remains.

[02:00] In the wake of the success of Fortnite Battle Royale, the original Fortnite has been renamed Fortnite Save the World. A critical bit of Fortnite's development comes from the involvement of Chinese multimedia firm Tencent.

[02:12] In 2012, Epic Games approached Tencent for help with the then-fledgling Fortnite seeking their input on turning the game into a live-service platform, meaning it would function as an ongoing revenue stream rather than simply being a single purchase product.

[02:27] Tencent agreed to help and supply additional financial resources and expertise in exchange for being allowed to purchase a 40% stake in the company, an arrangement to which Epic agreed.

[02:39] Following the merger, a number of high-profile staff retired from Epic, including Chris Blazinski, Adrian Chamilars, Lee Perry, and Rod Ferguson, all to one degree or another citing dissatisfaction with either the Tencent merger, the Games as a Service business model, or both.

[02:54] But that's not what you're here for. You don't want a history lesson placing Fortnite into an appropriate cultural context. You're here for hot Fortnite player-on-player action.

[03:07] It's player versus player. Wait, what did I say? Thank you.

[03:46] as having a personality.

[04:03] One of the things in particular that stands out to me about the meta-narratives surrounding Fort Leck...

[04:16] Isn't it weird how hostile the free-to-play track is?

[04:30] Like, it's not simply structured to drive pain for something or another. It actually starts... Okay, so let's all think about a concert.

[04:58] Okay, so what's all this about a concert in Fortnite? On February 2nd, 2019, Christopher Comstock, who performs under the DJ name Marshmello,

[05:12] played a 10 Marshmallow concert game mode

[05:29] got to watch a scripted concert event during which weapons and damage were deactivated to ensure that players couldn't be griefed and that the event wouldn't be interrupted with gunfire and explosions. It's maybe a bit of a pointless hair to split the fact that the concert was pre-recorded

[05:43] and not actually live, but, I mean, that's what we do here. We deconstruct narrative, and the idea that this was a live set was very much part of the narrative. The fiction extended to the fact that the mini-set

[05:56] was added to Marshmallow's tour schedule. A significant component of the implicit messaging was to demonstrate the flexibility of Fortnite, the concept of Fortnite as a content delivery platform.

[06:08] As a scripted event utilizing the game's engine, server architecture and assets, the concert is quite impressive. The crowd does end up looking a little thin because it turns out 60 people per match just isn't that many if you're trying to

[06:22] simulate an actual audience, but players maneuvering virtual bodies need a bit more space to do things than real people, and keeping the population low mitigated problems with players who are accessing on lower-end hardware or internet connections, minimizing the odds that they

[06:37] would lag out or just crash entirely. As a delivery platform, however, well, it demonstrates the flexibility and possibilities that Fortnite offers

[06:49] if you're DJ Marshmallow. The concert isn't actually built in Fortnite. It's full of bespoke assets and scripting that could only be constructed with the active participation of Epic Games.

[07:02] While Fortnite has a creative mode that allows players to build their own spaces, even very impressive spaces, nothing like this is remotely doable. While it's possible to put on a concert in Fortnite, it's not possible for you to put on a concert in Fortnite.

[07:20] The actual audience for this specific message is big-name collaborators. Epic is advertising the idea that Fortnite is a viable venue for crossover promotional opportunities.

[07:32] This is all part of the concept of games as a live service. so we should probably spend some time disassembling that particular narrative concept.

[07:44] Fortnite isn't really a game. Like, there's a game attached to Fortnite, but that's not the core of Fortnite. Fortnite is, first and foremost, a storefront.

[07:59] The monetization systems in Fortnite Battle Royale are seemingly simple on their face, but, well, join me on a journey. The two arms of Fortnite's monetization are the Battle Pass and the Item Shop,

[08:11] both of which are fueled by an in-game token currency called V-Bucks. V-Bucks are used here, as in most other microtransaction-based games, as a means to bypass financial regulations involving held value

[08:23] and some regional laws surrounding gambling with regards to the loot crate, because in many regions it doesn't count as gambling if the currency involved is non-fungible. Basically, in a lot of places, it doesn't legally count as gambling.

[08:36] If you're gambling with fun bucks, it can't be converted back into legal tender, so things that utilize all the structure, vocabulary, and psychological mechanisms of gambling, like video game loot crates or gachapon toys,

[08:48] aren't technically gambling as far as the law is concerned, because you can't convert your winnings directly back into dollars. Additionally, the use of V-Bucks also allows Epic to obfuscate the assigned value of both in-game purchases

[09:01] and the value of V-Bucks themselves by giving buyers a bulk discount for buying more and handing out V-Bucks for performing in-game activities. Nominally, one V-Buck is worth just under one US cent,

[09:14] but if you buy 10,000 V-Bucks at a cost of $99.99 US, you get an air quote bonus $3,500, so the actual monetary cost of anything you buy on the store varies by about 25%

[09:27] depending on how many V-Bucks you bought. If you're confused, that's the point. The primary utility of Bunny Money is to relieve you of the pressure and wane if this specific skin is worth $15 or... is it $11?

[09:42] This is on top of another really common strategy, where the amounts don't scale evenly and don't line up cleanly with the cost of actual items, increasing the likelihood that you'll always have some left over or will need to buy a substantial amount in order to get the thing that you want.

[09:59] This particular bit is pretty common, but Fortnite manages to take it to a whole new level. This is ultimately the meaning of game as a service. It's just a euphemism for a game that takes up all your free time and becomes the only game that you play

[10:12] because it's just an elaborate, constantly resetting Skinner box that utilizes progression systems and seasonal competition as a means to place you constantly in the path of an endless stream of monetary interactions.

[10:25] To top it off, as a game, Fortnite Battle Royale isn't even particularly great. The matchmaker is utterly bare bones and pays no regard to your performance so you almost always be matched with a mix of players who are barely functional and several who are so far above your skill level that you not even really playing the same game

[10:45] The building mechanics in Battle Royale are unwielding and create a tremendous skill gap that contributes to the aforementioned disparity, but they're also the whole gimmick that the game is built around, so that's kind of take it or leave it.

[10:58] The game is full of weird, unpolished edge cases, like vehicles all using slightly different control schemes even for shared functionality. You get on a hoverboard and the speed boost is down to left shift, but on a quad crasher, boost is spacebar even though left shift isn't down to anything on the quad crasher.

[11:15] Because of the way that systems interact, in particular the ways that the building mechanics are vital for defending against long-range attacks, but are also so effective for either closing distance or escaping,

[11:27] that the mid-range effectively barely exists, the game biases extremely heavily towards shotguns, basically becoming a contest of closing distance and gaining height so you can land a shotgun headshot on your opponent.

[11:41] If you strip out everything else, the game is a moderately okay shooter with a unique twist and a compelling aesthetic. It's not dire, but it's kind of just barely good enough to stand on its own

[11:53] without the rest of the hooks. and, oh boy, does Fortnite have hooks. The item shop is pretty grotesque when you break down its underlying mechanics. In contrast to pretty much every other game on the market,

[12:06] Fortnite only displays 10 to 13 items at a time, rotating on a daily basis. This has the dual purpose of obfuscating what's available and creating a FOMO response, or fear of missing out.

[12:19] If you see something you like, you have a limited window in which to purchase it, and with the total inventory of products obfuscated, there's no sense of how long it might be until that particular item is available again, or even if it will ever be available again at all.

[12:35] Incidentally, Alfonso Ribeiro isn't just suing Epic because his Carlton Dance made it into the game, but because they took his work and were selling it for eight bucks a pop. The other arm of the monetization system is the Battle Pass,

[12:47] which costs a little under $10 US and ties into the seasonal progression track system, which is itself broken into two tiers, freed and paid. Fortnite's cyclical gameplay is broken up into 10-week seasons,

[12:59] and the battle pass applies only for a given season. The paid track just throws piles of stuff at you every tier to incentivize playing more, including an early perk of an experience boost next season,

[13:11] just in case you were maybe considering not getting the next battle pass 10 weeks from now. What's interesting about the free track is that it doesn't nearly make use of slow-mo psychology. It's not just saying, oh, look at all this stuff you get if you bought the battle pass.

[13:26] Though, I mean, it is literally saying that right there. But in addition to that, it's making use of hostile design. The free track actually ends at tier 62. Though the season track goes until 100, there's no additional free rewards past this point.

[13:44] From here, it's not simply a matter of a fear of missing out. The entire battle path system is founded on the dopamine rush of unlocking something new every few hours of play to keep players coming back.

[13:56] Within that context, the point where the game stops giving you stuff entirely, the game is withdrawing the thing that is used to get you hooked. It is punishing you for having dared play this long without paying.

[14:09] This is manufactured discontent. And make no mistake, you will have to play a lot to get to this point. Again, with the layers of deliberate obfuscation, the broad progression systems are broken into two parts.

[14:23] First, account level, which is itself broken into total level and seasonal level, and the battle pass, which we discussed. Progressing in level is done by earning experience, which is rewarded at the end of every match,

[14:37] while progressing the battle pass is done by earning battle stars. Battle stars are rewarded in amounts ranging from 2 to 10 for every level, and for completing challenges which come in daily and weekly flavors.

[14:49] Daily challenges tend to be fairly straightforward, ranging from placing in the top 25 to scoring a number of takedowns with a specific weapon type, while weekly challenges tend to get more varied and abstract and include things like visiting specific locations on the map.

[15:03] Now, briefly, I want to touch on the psychological design elements of the weekly challenges and the way that they're presented. First, there's the element of FOMO in the completion reward of 5,000 XP.

[15:15] A substantial amount of experience requires completing four challenges, but only three are available for free. Second, the paid battle pass challenges aren't simply locked, but are turned into a mystery box.

[15:28] If you don't pay, you don't even get to see what they are. Tantalizing, isn't it? You only need one more. You're so close. Let's go back to these tracks. They're presented as roughly analogous, literally in parallel,

[15:46] but progression along these tracks aren't even. The gold tier players have access to more challenges which reward more battle stars which in turn reward direct experience on top of experience multipliers Gold players don just get more they get it faster and with less effort

[16:05] So this point, Tier 62, it's highly unlikely that you'll actually get to this point without playing a lot of Fortnite every single day. I've actually needed to play a lot of Fortnite pretty much every day in the course of making this video,

[16:20] both in order to ensure I understood the game itself well enough to speak about it constantly, and also just to get the specific kinds of footage I was looking for, and at the midpoint of Season 8, I'm less than halfway there.

[16:36] This maybe seems like I'm just complaining about the free-to-play players not getting enough stuff, but that's not actually the point. The underlying purpose of demonstrating all this is to show the mechanisms that the creators are willing to employ.

[16:50] These psychological tricks are in effect a form of rhetoric, a form of persuasive speech. They are trying to persuade you by applying select forms of pressure, and it is, I think, worth understanding the mechanisms of that pressure

[17:04] so that we can better recognize how and when we are being persuaded. Also, it's worth keeping in mind that as a season is only ten weeks long, a paid player can slip back into being a free player at any time.

[17:19] In order to retain all the perks of being a paid player, one would need to buy all four to five season passes every year. All of this goes hand in hand.

[17:31] The Marshmallow concert isn't a thing happening in parallel to the monetization system. It's a core pillar. The external purpose of things like this are fairly straightforward. It's a publicity stunt, an oddity that people will talk about.

[17:43] The cost of assembling the technical aspects of the concert and paying Comstock for its participation were effectively weighted against a direct ad buy, and based on the coverage, Epic Tencent is probably pretty happy with the outcome.

[17:56] The internal purpose is a little more arcane, and I wouldn't blame you if you wanted to use the word sinister. The purpose of the concert is to utilize the social pressure of exclusion.

[18:08] Let's take a closer look at a couple key moments. If Marshmello is calling out for you to use your favorite emote,

[18:29] well, if you haven't paid in, odds are you don't have any, or the ones you do have are going to be pretty generic and lame. Events like the concert create environments where the ability to self-express is placed at a premium,

[18:44] In order to feel like a full and active participant, you need to be able to perform. The catch is that literally every unique action has an attached price tag.

[18:56] Where do you see everybody doing that water park right now? Where do you see that water park? And there are some things that you'll simply never get without paying. Players who haven't bought a skin don't even have control over their basic image.

[19:10] There isn't a roster of default looks to choose from. Your look is assigned randomly after every match. There isn't just a layer of FOMO, the sense that others around you with cooler, more expressive character models are having more fun,

[19:27] are better able to project themselves into the social space. There's a level of hostility in the design. If you don't buy in, you aren't nearly limited in your options of expression.

[19:39] you are actively denied control over the most basic element of how you choose to look in the virtual world. Nothing that Fortnite does is particularly new. These complex monetization systems with multiple layers of obfuscation,

[19:55] you can find this in pretty much any mobile game, and plenty of desktop and console games are laden with cosmetic microtransactions, legally dubious gambling, and other ways to aggressively monetize the game.

[20:08] Lots of games use progression systems and incremental rewards as part of their core loop to keep players playing. Fortnite is really just a maturation of those systems, a refinement of every habit-forming trick and microtransaction pressure point developed in the last decade

[20:25] condensed into a weaponized product targeted at kids. One of the articles that originally called my attention to all of this was one Nick Statt wrote for The Verge titled, Fortnite's Marshmallow Concert

[20:37] was a bizarre and exciting glimpse of the future. I disagree with Nick's breathy excitement, but on the whole he's right. Fortnite is a glimpse of the future.

[20:50] An awful, perpetually monetized, vertically integrated, vaguely hostile future.

[21:05] Thanks for watching!