Epic Games – Impeccable strategy.

Another strategic masterstroke from Epic Games.

• Epic Games is showing no signs of being surprised by Fortnite’s success and has made yet another brilliant move to oust what it sees as the middlemen in the gaming industry.
• This latest move comes hot on the heels of its strategy to break Google’s stranglehold on app distribution (see here) and Sony’s intransigence with regard to cross-platform play (see here).
• The latest version of Fortnite (8.10) strongly encourages players from different platforms to play against each other.
• Smartphones, PS4, Xbox One and Nintendo Switch players are all included in this update.
• Cross-platform combat is opt-in but players that do not opt-in are limited in terms of the functionality that they experience as a result.
• Effectively, players from different platforms will be pushed into fighting one another every time they board the battle bus.
• There is some reluctance for players from different platforms to play against each other due to the disparity of both input controls as well as performance.
• For example, players of a similar skill find that they do better on an iOS device compared to Android presumably due to the better processing available on iOS.
• It is this reluctance that I think Epic is seeking to overcome.
• Epic’s official line is that this move allows it to balance the player pools more easily and thereby run more game modes, but I think that there is much more to this.
• If Epic is successful in breaking down this reluctance, it will, at the same time, reduce user’s preference to play on one platform or another.
• The less players care what platform they are playing on, the more loyalty and brand preference Epic Games will be generating which it can then use to branch out into other areas.
• This has already begun with an app store on PC to challenge Valve and I suspect that a rival app store for Android will soon follow.
• Because Fortnite is wildly popular, its app store will quickly be on millions of Android devices giving it the critical mass to attract other developers.
• It is also likely to improve the economics above and beyond the traditional 70:30 split, giving developers a further incentive to sign up.
• Users are also a crucial piece of this puzzle and breaking down their awareness of the platform on which they are playing opens the way for Epic Games to expand beyond gaming into other Digital Life services.
• There are already signs of this as DJ Marshmellow recently held a virtual concert in Fortnite that was attended by 10m users (see here).
• Perhaps its own console or mobile phone will be next although I doubt that this would add much value to Fortnite which has already struck monetisation gold through in-game purchasing.
• Instead, I expect Epic to use the popularity of Fortnite to entice players to spend more time with different services within its environment
• This is how it becomes an ecosystem in its own right allowing it to join the ranks of Alibaba, Google, Tencent, Apple and so on.
• Epic Games is increasingly looking like the investment that Tencent got right.