Is excitement in Fortnite slowing down? Epic Games sees decline in money from the game
In a sign that interest in the video game Fortnite is perhaps waning, earnings from the game that made Cary-based Epic Games an industry juggernaut continue to decline.
Revenue from Fortnite in January hit its lowest level since November 2017, according to a new report from Nielsen’s SuperData.
While SuperData did not disclose how much money Epic made from Fortnite in January, a report from Recode — citing SuperData numbers — put November 2017’s haul at around $55 million. The free, battle-royale version of the game first launched in September 2017.
At its peak, Fortnite brought in $372.2 million in December 2018. But as recently as last September, monthly revenue dropped below $100 million, SuperData estimated.
While money from the game continues to decline, Fortnite has remained a cash cow for Epic Games. Last year, the game made $1.8 billion, making it the top-grossing online video game of that year, according to SuperData.
However, that total was down 25% from the year prior, when it was also the top-grossing online video game with an estimated $2.4 billion in revenue.
Epic Games declined to comment on SuperData’s report, with a spokesperson responding the company doesn’t comment on, or share, financial information.
(After the publication of this story, Epic Games provided a comment, which is attached below.)
Will Hershey, CEO of Roundhill Investments, which tracks the video game industry, said this appears to be a meaningful decline for Epic Games.
“I think that there has to be some real concern,” Hershey said in an email. “Epic has now had two years to perfect its monetization strategy and optimize [average revenue per user], suggesting that engagement and player count have meaningfully declined.”
Hershey said he believes that Fortnite will become increasingly dependent on the launch of new seasons and content within the game. Just last week, a new season launched on Fortnite built around themes of spies and covert operatives. The technews website Techcrunch called the new season a return to form for Fortnite.
Epic makes money from Fortnite not from selling the game, but instead by selling upgrades around appearances and custom dance moves. In each season it launches, those upgrades change giving players new things to purchase. The upgrades often coincide around partnerships with well known intellectual property, like “Star Wars,” the television show “Stranger Things” or the “John Wick” movies.
It’s those constant upgrades that has kept Fortnite popular for so long, a report from Nielsen said last year. But a surge of other games copying that payment model have made competing for money from users harder.
Outside of Fortnite, other parts of the business appear to be growing.
In 2018, Epic launched a competitor to Steam — as well as Apple and Google — called the Epic Games Store in an effort to bring more competition to app stores. Epic Games CEO Tim Sweeney has said that Apple and Google, especially, charge developers too much money. The Epic Games Store only takes 12% from sales made on its platform while Apple and Google take 30%.
However, Epic’s competitors in these spaces are pretty entrenched.
“Steam,” Hershey noted, “the most popular platform for PC gaming, has achieved a new record for concurrent users.”
The company also licenses its graphics software engine, Unreal, to companies that use its 3-D rendering technology, like movie studios and design firms.
The company brings in around $200 million per year through its licensing of the engine, Michael Pachter, an analyst at Wedbush Securities, told The News & Observer last year.
The decline in revenue from Fortnite comes as Epic continues to expand locally. The company said it will begin construction this year on a new building at its corporate campus in Cary that could potentially make room for 2,000 more employees.
Update: After the original publication of this article, Epic Games Communication Manager Nick Chester issued the following comment via email:
“SuperData does not and has not ever had access to Epic’s Fortnite revenue data, and SuperData’s reports do not accurately reflect Fortnite’s performance. We are disappointed that SuperData has repeatedly published wildly inaccurate reports about Fortnite based on what we believe is questionable methodology.
“While we do not and have not publicly shared revenue numbers for Fortnite, we will say that SuperData’s reports do not align with reality.”
Asked to respond, SuperData stood by its reporting. Spokeswoman Jenna Richard said in an email:
“SuperData has been providing transparency for the games industry since 2009. As an independent research firm, we have a proven methodology and validation process that enables us to forecast and provide market intelligence to help our clients make informed business decisions.
“We stand behind our previously reported numbers for Epic’s Fortnite.”
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate
This story was originally published February 25, 2020 at 5:30 AM.
