In the battle royale of video game development, the gaming giant behind Fortnite is betting that crowdsourcing will lead to its next blockbuster title. And in just six months, the new program has turned a handful of amateur developers into millionaires.
Epic Games threw the hottest party on the internet last weekend when a record 6.2 million concurrent players dropped into gaming areas Titled Towers and Greasy Grove on Saturday to celebrate the rerelease of Fortnite’s original 2018 map. The launch of Fortnite OG was a powerful reminder of just how much the AAA title (gamespeak for blockbusters) means to Epic spiritually and financially.
When Fortnite launched in 2017, Epic was a 500-person company—known primarily for producing the Gears of War franchise and creating the industry-leading game development software, Unreal Engine. It was booking about $100 million per year in revenue. A year later, Epic made a staggering $5.6 billion in revenue. Ninety-seven percent of it was from Fortnite.
Over the next few years, Fortnite’s battle royale-style game became a cultural touchstone. There were collaborations with brands like Marvel, Star Wars, and Netflix. Marshmello and Travis Scott threw digital concerts on Fortnite’s servers. “With Fortnite, we saw something that was a fundamental transformation of the game business,” Epic Games CEO Tim Sweeney said at the Unreal Fest developer conference in early October. “That was turning away from a small-scale experience for hardcore gamers into a truly mainstream social experience.”
According to Forbes estimates, the Cary, North Carolina-based developer posted revenues of more than $6 billion in 2022, with the vast majority still coming from Fortnite. The company now has over 4,000 employees and a much grander ambition: to turn Fortnite from a single video game into a full-blown creative ecosystem with thousands of games and digital experiences, designed not just by Epic but by its 70 million monthly active users. The goal of this sandbox-style game mode, called Fortnite Creative, was to slowly introduce regular gamers to the Unreal Engine—a complex professional tool used to create top-tier video games plus computer-generated imagery for hit shows like The Mandalorian and Westworld. The hope is that the next Fortnite-sized hit is developed on Epic’s own platform.
Even Epic understands it can’t solely rely on its own staff to come up with a steady stream of megahits. “We have no illusion that we could build first-party games to get us to the size that we really want to grow to,” says Saxs Persson, Epic’s executive vice president of the Fortnite Ecosystem. “What we are focused on is building systems that scale to 100 million, 200 million, 500 million people and provide the economic incentive for people to participate on that platform.”
“When I first started, my goal was that I wanted to pay off my car,” says Dylan Johnson, who earned an estimated $8 million for his Fortnite mini-game, Go Goated.
For now, Epic is willing to subsidize this epic quest for future hits. In March, the company announced it would be distributing a small portion of its Fortnite revenue to anyone who makes a game on its platform. The payouts are based on the amount of engagement each mini-game receives. In October, Epic announced that it had distributed $120 million to creators in the first six months of the program.
Most of the creators will get pocket change: Around 85% of 13,000 total creators will make less than $100 a year on Epic’s platform, but the company projects that 220 creators could earn more than $100,000, 43 could make more than $1 million, and a fortunate five could make upwards of $10 million in a year.
A handful of everyday gamers, the first to jump on the opportunity, have become millionaires practically overnight. In 2020, for example, Dylan Johnson was a Covid ICU nurse who tinkered with Fortnite Creative’s tools on his PS4 to unwind after long night shifts. The 26-year-old Ohioan was one of the game’s first popular creators and eventually made enough money to quit his nursing job. This year, after the implementation of the revenue-sharing model, his zone-based shootout mini-game Go Goated will earn Johnson an estimated $8 million, according to Forbes estimates.
“I didn’t know it was going to be this big,” Johnson says of Epic’s new program. “When I first started, my goal was that I wanted to pay off my car. Then I realized that there’s like a huge market for this, and we can grow astronomically.”
As the money from user-generated content rolled in, new content studios have emerged like gold-rush boom towns. Led by twentysomething Fortnite obsessives with cash to spend but no entrepreneurial experience, these grassroots companies have hired anywhere from a handful to a couple dozen employees, mostly freelance contractors who know the Fortnite platform well but have no formal game development training. For instance, Johnson’s company, Good Gamers, employs six freelance designers, including one who was previously a construction worker and another who was a librarian. “I’m kind of learning as we go,” he says.
These amateur developers have been aided by Epic’s introduction of more robust creative tools over time, beginning with only slight variations on Fortnite’s signature Battle Royale mode, and even to this day still retaining the look and gameplay feel of the original. Because different genres of these mini-games fall in and out of favor rapidly—vertical parkour variations like “OnlyUp” were popular this summer, and recently tycoon-style games have caught on —creators are constantly chasing and copying each new viral success. The marketplace mirrors the shifting tides of other Gen Z-heavy platforms such as YouTube and TikTok. Attracting players often depends more on agility and marketplace savvy than design brilliance.
For streamers and YouTubers who already built huge audiences during Fornite’s Battle Royale popularity boom, the Creative mode initially represented a new way to engage and monetize their existing fanbases. Now video game creators like Ali Hassan, known to millions of followers on Twitch and YouTube as SypherPK, says that Epic’s monthly payouts rival, and even exceed, what he makes from streaming and video, which Forbes estimated to be $12 million last year. Because of that windfall, Oni Studios, the company he created with his wife, Daniela Ali, laid off five employees who worked in live production and discontinued the company’s talent incubator in order to invest its earnings into game creation.
In many ways, SypherPK’s video content now serves as marketing for his primary product, the mini-games. Aided by a massive marketing push, his company’s team-based shooter Rocket Wars reached five million hours of playtime in its first 30 days of release in June and is expected to generate at least $2 million by the end of the year, with high profit margins. “We felt like I was in a very good spot to really lean in and start defining this landscape,” SypherPK says.
Beyond making game variations of their own design, many creators have found success designing game-like advertising experiences for companies that want to reach young people. Thirty-one-year-old Hannes Van der Haegen, whose Belgium-based Team Unite employs seven full-time employees and several contractors, has worked with brands such as Adidas, Universal Pictures and even Oral-B, for whom they designed a tycoon mini-game in which players race to build the best toothbrush factory. Van der Haegen says this strategy has helped him diversify his revenue streams, but he worries about his dependence on Epic. “As long as Fortnite stays one of the biggest games in the world, always beating the expectations, then we’re on the path to success,” he says. “But no matter what we do, in the end we rely on Epic Games’ platform.”
Zak Phelps, a former senior director of product design at Epic and one of the people who put together the original pitch deck for Fortnite Creative, says that a user-generated content mode was always part of Epic’s plans, an extension of the company’s core effort to democratize gaming. In its original form, the strategy was closer to creation as a form of play, with simple “single block” building mechanics that anyone could master.
Persson says Epic is hoping it can eventually convince the world’s biggest professional game studios that there is more opportunity making original titles for Fortnite than there is in the open market, a feat yet to be accomplished by other similar open-ended game creation platforms such as Roblox and Minecraft. Epic would be thrilled if users spent 90% of their time playing games developed by others—the figure is closer to 50% now.
There is some precedent for this kind of spin-off success: Counter-Strike and Dota 2, two of the most popular esports titles in the world, each started as community-created “mods”—or extensions—of other games and, in the end, became more popular than the original. It’s not that much different from how Fifty Shades of Grey, which started life as fan fiction for the Twilight book series, eventually sold 15 million copies, spawned two sequels and three film adaptations that grossed over $1 billion combined.
“The question is, will the next big AAA game success come out of Fortnite?” Phelps asks. “I don’t know if it will ever happen, but what I do know is that there will be huge games within Fortnite that will be as big or bigger than any AAA game experience in the same way that there’s YouTubers like MrBeast, who, right now, generates more views than probably almost any top TV show.”
Epic’s 52-year-old CEO Sweeney, who is worth an estimated $4.1 billion, admitted at Unreal Fest that the user-generated content model is a lower-margin business for the company, but it is also the area where it expects to see most of its growth in the coming years. Epic recently laid off 800 employees so that, in Sweeney’s words, “we won’t run out of money as we build the metaverse.”
Ultimately, he sees Epic competing with content giants like YouTube and Netflix as much as other games for the audience’s attention. And if the dream of a robust metaverse ever does come to fruition, Epic wants to be well positioned. “We’re [not] going to be the only player in this space,” says Persson. “But we want to drive the bus.”
This article was first published on forbes.com and all figures are in USD.