Fortnite remains top earning video game, bringing in $1.8B for Epic Games in 2019
Epic Games’ flagship video game Fortnite continued to be a cash cow in 2019, becoming the top grossing online video game for the second year in a row.
The Cary-based company wrangled an estimated $1.8 billion from Fortnite last year, according to a new report from Nielsen’s SuperData. That beat out other popular video game titles like League of Legends, Candy Crush Saga and Pokemon Go.
However, the 2019 haul represented a 25% drop from the record-setting $2.4 billion Nielsen estimated that Epic made off the game in 2018.
Epic has been able to keep Fortnite at the top because of continual tweaks and evolutions to the game, Nielsen’s report said.
“The game still surpassed other free-to-play titles as a result of consistent content updates and monetization through battle passes,” the report stated, while also highlighting partnerships with other pop culture institutions like “Stranger Things,” “Avengers” and “Star Wars” that continued to pump interest into playing the game.
The game also has an incredible ability to convince players to spend money within it. Fortnite is free to play for all users, but it sells upgrades around appearances and custom dance moves within the games, which are very popular with young players trying to stand out.
For example, while Fortnite has fewer players than another extremely popular game, League of Legends, the people that play Fortnite are more than twice as likely to spend money on in-game content, according to Nielsen. League of Legends, the most popular PC video game in the world, brought in $1.5 billion last year, Nielsen said.
Epic was one of the first video games to popularize the free-to-play model. But other video games have quickly followed suit. Revenue from free-to-play games increased by 6% to a total of $87.1 billion in 2019, Nielsen said.
The growth of Fortnite has allowed Epic to expand rapidly. Since 2017, the company has seen its valuation balloon to $15 billion, the addition of hundreds of new employees and the beginning of construction on an expansion to its corporate campus in Cary. It’s also made its CEO and founder, Tim Sweeney, one of the richest men in North Carolina.
Beyond Fortnite, Epic is growing other parts of its business as well.
Last year, the company launched the Epic Games Store, where developers can sell apps and games, a model not too dissimilar to platforms provided by Apple and Google. The company is using its store to compete against those platforms, which Sweeney has said charge developers too much money. The Epic Games store only takes 12% from sales made on its platform while Apple and Google take 30%.
The company also makes money licensing its Unreal Engine, the graphics software backing up its games. That software is used across a variety of industries, from movies and architecture to car design and brain surgery, which find its ease of use and 3-D renderings ideal for image rendering.
Epic brings in around $200 million per year through its licensing of the engine, Michael Pachter, an analyst at Wedbush Securities, said last year. He thinks there is still a lot of room to grow that number.
And while Fortnite is seeing its earnings fall, don’t expect it to crash out of the list of top earners in 2020.
“I think the game has legs and will be No. 1 again [this year],” Pachter said in an email.
Will Hershey, CEO of Roundhill Investments, was more conservative in his estimates for the game’s potential in 2020, saying it would be unlikely to repeat as the top earning game.
“[Last year] was a transition year for Fortnite, where it matured and was optimized from a monetization standpoint,” he said in an email. “At the same time, it appears as though [the] user base may have peaked. ... I would say that it’s unlikely for them to repeat.”
Hershey said League of Legends and an unreleased game called Cyberpunk 2077 have a shot at knocking Fortnite off the top rung in 2020.
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 January 6, 2020 at 3:09 PM with the headline "Fortnite remains top earning video game, bringing in $1.8B for Epic Games in 2019."
