Fortnite | Becoming the Metaverse
Exploring the implications of Epic's launch of Unreal Editor for Fortnite
Two weeks ago, I watched with millions of other gamers as Fortnite released Chapter 4: Season 2. If you aren't familiar with Fortnite, it's one of the most popular games in the world with over 500 million players. It popularized the “Gaming as a Service” (GaaS) era that monetized the game post-release by offering the game for free and selling cosmetic upgrades to the tune of $1.2 billion in their first year.
They also popularized the cyclical release model, dropping updates to the game every few months, rather than the traditional model of releasing a new editions every year (eg. Call of Duty), which brings me back to my story. Season 2 was the latest Fortnite update and it was nothing short of impressive. I was blown away by the impressive skyscrapers and forests, unique weapons and augments and ever-creative ways to move around the map. Every season, they somehow manage to outdo themselves.
And while the game itself is an incredible feat of engineering, game design and business strategy, a few days ago (on my birthday coincidentally), the team at Epic Games dropped what might be the biggest announcement in the history of Fortnite.
Unreal Editor for Fortnite (UEFN)
This announcement will certainly have an enormous impact on Fortnite itself, but I predict that it’ll also change the landscape of the Metaverse as well, possibly even forcing Apple’s hand.
Let's get into it.
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Fornite (along with hundreds of other popular games) is powered by a gaming engine built by their parent company, Epic Games, called Unreal Engine. It's "the world's most advanced real-time 3D creation tool for photoreal visuals and immersive experiences."
With the release of Unreal Engine 5 back in April 2022, the graphics have gotten incredibly realistic. So much so, that Industrial Light and Magic even used UE5 to generate lifelike, dynamic scenes on their StageCraft wall when they filmed The Mandelorian allowing them to change lighting and angles in real time with the camera movements and actions happening in the scenes.
Epic offers the power of Unreal Engine to other game developers as well, allowing them to import, download or even create their own 3D models, animate them, add realistic textures, play with dynamic lighting and more.
But while independent game developers can use Epic's tools to build their own games and even sell those games in Epic's game store, the worlds themselves are still disconnected. If I want to play multiple games, I have to create multiple accounts.
If I log into Gears of War and pick up a Tripwire Crossbow, I can't take that weapon into Tomb Raider. Or if I earn Creds in Valorant, I can't use them to buy a Battle-Car in Rocket League.
But… what if you could?
What if there was a greater universe where all of these games existed like the Oasis in Ready Player One? Where the items you earn from a quest on one world can be used in a battle in the next? Or where in-game currencies convert to a standardized credit system across the universe?
That's where Unreal Editor for Fortnite comes in.
UEFN gives game creators the ability to build other worlds WITHIN the Fortnite universe, allowing you to traverse the various worlds with your Fortnite avatar.
Whether you like the surreal…
Or something totally different…
The options will be endless.
Having a persistent in-game identity is an enormous step toward the greater vision of the metaverse. Some worlds may restrict or alter your skin, abilities, items, and currencies and others may opt to use those assets cross-world, but in either case your in-game identity stays the same.
We see a version of this in Meta's Quest platform as well where your Meta account acts as your in-game identity across games and worlds which begs the question, how is Fortnite any different? And, more importantly, how will Fortnite win?
How Fortnite Will Win
As I wrote in this article about Meta's pivot toward the Metaverse, there are a few things that are required for the Metaverse to exist:
Infrastructure: an interoperable ecosystem
Objects: skins, items and digital property
Worlds: places for players to visit
Experiences: not just places to go, but things to do
Hardware: the gear that allows you to interact with the meta dimension
But you know what? I think I made a mistake here. I defined the hardware as VR headsets, haptic suits and immersion rigs. But I actually think the hardware doesn't have to be quite so immersive. After all, humans have been getting lost in 2D experiences for decades from games like World of Warcraft to alternate realities like Second Life. So why should the metaverse be defined so narrowly as to only include virtual reality? The metaverse probably will start out in 2D (ie. laptops and phones) before moving to 3D (VR/AR).
If we expand that definition, it immediately becomes clear how Epic can win the metaverse race.
Infrastructure: Unreal Engine
Objects: skins, gliders, pickaxes, V-bucks and now, an entirely new suite of objects that game developers can create with UEFN
Worlds and Experiences: game developers can now build worlds and experiences within Fortnite
Hardware: your laptop, console, mobile phone and, eventually, headset (we’ll talk more about this in a bit)
Ultimately, I believe it shakes down to two concepts that I've written about before:
Means of Creation: Epic's infrastructure to build the in-game objects, worlds and experiences is leading the way in technological capabilities as well as openness and interoperability. Meta, on the other hand, doesn't offer a game engine. In fact, if you were to build a game for Meta's Quest headset, you'd end up using a game engine like Unreal Engine.
Means of Distribution: And on top of that, if you're a game developer and you want to get your game in the hands of as many players as quickly as possible, do you build for Fortnite's 500 million players across all platforms or Meta's 5 million users for Quest headsets only? It’s a no-brainer.
Epic Games has had the dominos lined up for a while and with the release of UEFN, they have tipped over the first one that I predict will cascade into an industry-defining ecosystem being built within Fortnite.
In Epic's demo of UEFN last week, they not only showed off some fantastic battle games set in different worlds, but also a really cool escape room showing that, despite Fortnite’s history as a Battle Royale, many different types of experiences can be created within Fortnite. In time, I believe we'll see more worlds that are NOT battle games than worlds that are. Worlds like…
Co-working spaces with other users
Virtual malls with realistically rendered products that you can purchase and have shipped to your real-world home
Experience simulations like put put, flying an airplane, or surfing a monster wave
Recreations of real-world places like museums, monuments or tourist hot spots like Time Square
Let’s wrap this up with a definitively far-fetched prediction.
Forcing Apple’s Hand
Apple has never been known for their games. Their computers just couldn’t handle the intensive processing power required for gaming… until now. With their M-series chips, they can handle the load, especially if those games were designed specifically for Apple Silicon.
Apple is rumored to be dropping a new product soon: their take on a VR headset. And so far, one of the best applications of a headset is gaming - the very thing Apple can now handle but still isn’t great at. If Apple wants to get a leg up on Meta, they need to give their customer base a reason to buy their new headsets. Like a hit game.
Fortnite, for their part, has been rumored to be working on a first-person mode, making the game even more immersive and potentially able to be adapted for VR. The problem is that they don’t make hardware so they’re going to have to find a platform to build for. The most obvious would be the Meta Quest since that’s one of the more advanced headsets on the market.
Here’s my take: Apple and Epic Games should squash their beef and team up.
Apple can provide Epic with a headset play to truly be cross-platform and Epic can provide Apple with a gaming play for their headset.
Just my two cents. I think it could be cool :)
I’d love to hear your thoughts! Drop ‘em in the comments.
That’s all for this one - I’ll catch ya next week.
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Yeah there's definitely a lot of business savvy at Epic/Tencent. I think you can certainly argue that Fortnite is the game that defines the GaaS episode of the larger F2P era. But I think the fragility of GaaS probably precludes it from being the ultimate evolution of Free-to-play.
By 2017, Fortnite was a latecomer to the F2P party. The absolute omnipresence of F2P in mobile games (even if most just feel like glorified slot machines), the advent of the 'monetization designer/manager' roles in the industry (a role which now more commonly falls under the another nascent title: 'product manager/director') and other examples of F2P MTX at huge scale all came sooner.
But in terms of "GaaS", it is more unique. In 2014, an article on Gamasutra (now GameDeveloper.com) reported that the "vague notion of games as a service is gaining traction in the industry". In his 2018 GDC talk, "GaaS is Dead", F2P games veteran Michael Gordon suggests that GaaS began with Facebook and MySpace games, where hardcore conversion rate optimization, user acquisition and retention metrics were used to boost revenues. As expertise from browser games bled into teams working mobile, PC and console games; both the business model and terminology gained traction.
But Games-as-a-Service is quite unsustainable for most companies because, at its core, it relies on very large player numbers. In the same talk, Gordon makes convincing arguments that GaaS can't really work on mobile due to how impactful getting featured is and how challenging it is to efficiently grow/sustain your userbase beyond the GTM honeymoon usercount spike. Fortnite divorcing Apple, adopting browser-streamed options on iOS and refocusing on PC a ballsy but brainy move. Only recently in 2022, Sony's investors pack (Game & Network Services Segment) included a slide entitled "Exponential Growth to be Sustained by PC Titles Beyond FY22". The high-margin money is on PC.
To merely survive with a GaaS model you have to have a strong core game, a well resourced marketing effort, a mammoth dev team to pace out new content and a very large PC playerbase with low or zero platform costs. As noted by commentators like popular YouTuber YeongYea, a slew of 'live service' games is sunsetting or stopping dead this year due to dwindling player numbers (CrossfireX, Back4Blood, Marvel Avengers, Rumbleverse, Knockout City, EchoVR, and more). He summarises: "Given how much time live services demand from players, there was bound to be a point where the genre would buckle from oversaturation. There are not enough players with enough time to populate so many live services and the unsustainable nature of these games that rely heavily on number of concurrent players and player engagement is starting to show."
Fortnite placed a good bet in the Battle Royale genre after Epic teamed up with Chinese F2P publisher Tencent. It had a somewhat unique combination of combat with (basic) construction. It made a deliberate and smart choice to adopt a more universally attractive, youth-friendly, comicbook style. Its design uses a third-person perspective to simplify the construction gameplay and show off vanity gear. Their marketing team courted and supported streamers who endorsed the game to hundreds of thousands for FREE. And according to this player, their team actively talks to players:
"They are reliably responsive, casually interactive, and constantly rake in feedback from their players. They care about what the players have to say and are always open to taking in suggestions/ideas for how to improve the game."
It's absolutely no accident that Fortnite is a roaring success. There's a continuous history of astute design and business decisions at play, and probably some strong tech decisions in the mix that are less obvious. The latest decision to turn the game into a self-perpetuating content creation platform is really clever, and barring a seismic technology shift, secures healthy player numbers and revenue for years to come.
To your point about borrowing of ideas, I totally agree. It's a cute nod to its gameplay roots as an Arma 3 mod (DayZ) that the Unreal Fortnite Engine will itself spawn hundreds of new maps and mods.
Hi Jacob, I'm loving your articles but I think your most recent one attributes too much to Fortnite. It didn't usher in GaaS, that was the Free-to-play (F2P) genre and the evolution of the microtransactions (MTX) model. That significantly predates Fortnite, to the extent that in 2009 Chris Anderson, a Wired Editor, published a book about its rise in popularity (Free: The Future of a Radical Price).
1999 QuizQuiz (South Korea) - "one of the first F2P games using a MTX revenue model"
2001 Runescape (UK) - $1bn lifetime revenue, £50M annual profit
2001 Habbo Hotel (Finland)
2003 MapleStory (South Korea) - $3bn lifetime revenue
2003 Second Life (USA)
2007 Team fortress 2 (USA)
2009 League of Legends (USA)
2011 Team Fortress 2 goes F2P, adds MTX
2012 Runescape adds store & MTX - $1bn lifetime revenue, £50M annual profit
2013 Dota 2 (USA)
2016 Overwatch (USA)
2017 Fortnite (USA)
It is probably fair to say that Fortnite has popularised the cyclical release model in the F2P space, if we think of this as 'seasons' that dramatically alter the world, introduce new gameplay mechanics and cost no money to experience. However, you could argue that another very popular F2P game, Overwatch, began this a year earlier and deserves this accolade.
"The return of the evil dragon aspect Deathwing the Destroyer tears through the dimensional barrier within Azeroth, causing a sweeping cataclysm that reshapes much of the world's surface."
Outside of the Free-to-play space, 'seasons' go back much farther. World of Warcraft began introducing changes to its persistent world with the Wrath of the Lich King expansion in (2008), which introduced a new continent to explore as well as a new player class. It followed this up in Cataclysm (2010) where the game's two main continents were redesigned with a changed landscape and new areas, plus major gameplay changes and two new playable races.
I liked the article, but just wanted to point out that up until this point Fortnite has been riding on coat-tails more than seriously innovating. It wasn't the progenitor of the Free-to-play microtransactions monetization model, nor the 'battle royale' gameplay genre (we have PUBG and DayZ to thank for that), nor First-person multiplayer with construction mechanics (Minecraft, Team fortress 2, Garry's Mod, SourceForts) nor seasonal gameplay and world building (WoW, Overwatch). What it can celebrate is that in many ways it expanded these borrowed ideas in bigger and better ways than ever seen before.