'Fortnite' creates hard-to-define, untapped space across esports
Editor's note: This story is revised from the print edition.
Just in case you thought the esports industry was starting to shake out into something more predictable a year after the first wave of major outside investment, here comes Epic Games’ “Fortnite.”
The wildly popular battle royale-style shooting game is the hottest title in the gaming world, and Epic’s May announcement that it would fund $100 million in prizes through 2019 — dwarfing prior esports prize pools — only added to the fervor.
But other than that, there’s little certainty about the business opportunity presented by Epic, which indicated in a June 12 blog post that it will eschew a professional league, franchised team sales or even the concept of teams as they’re traditionally understood for now.
Brands are hungry to leverage the massive, enthusiastic audiences “Fortnite” draws with its deceptively simple game play, which rewards expert shooting, stealth, hunting and building skills in a social experience that’s free to play and available on every major gaming platform. They also want to associate themselves with the celebrities from sports and music who love the game, like rapper Drake and Boston Red Sox pitcher David Price, who had to fight off rumors that he missed starts because of carpal tunnel syndrome triggered by “Fortnite.”
But Epic’s approach to brand partnerships is also unclear, and how streaming sites and broadcasters even present a competition of 100 players at once — instead of a head-to-head team matchup — is open to debate.
“It’s an interesting space because there are a lot of TBDs out there, and what we’re seeing is events that are taking place in so many different ways,” said Ryan Musselman, senior vice president, global partnerships, at Infinite Esports & Entertainment, the holding company funded by Texas Rangers co-owner Neil Leibman that owns OpTic Gaming. OpTic is one of several tier-one organizations to sign “teams” of four “Fortnite” players, despite there being no standard way of contesting the game as a team.
It’s an interesting space because there are a lot of TBDs out there, and what we’re seeing is events that are taking place in so many different ways.
Epic is focusing its initial effort, the just-announced Fortnite World Cup, on competitions between individuals and two-player teams. Epic did not reply to interview requests.
Musselman said the OpTic team is an experimental expense, and they’re not concerned about salary growth while details shake out.
“Fortnite” is important not just because of its large fan base, but because it seems to be carving out entire new space in the commercialization of video game viewers — falling somewhere between mass-participation casual gaming and the world-class elite circuits that make up esports today.
In Los Angeles during the E3 gaming conference June 12, Epic ran a pro-am “Fortnite” event at Banc of California Stadium that paired up 50 expert players with 50 celebrities to compete as pairs, with $3 million in prizes going to charity. It sold out 3,000 tickets in person and was viewed by more than 2 million fans online. With a cheerful, laid-back vibe, it was more concert than sporting event.
“I think it’s OK if it stays as kind of a concert feel, I think that’s new,” Musselman said. “If that’s what it gets defined as, it’s still going to accomplish a great deal of success and it actually could affect the way other developers look at building games.”
It’s hard to imagine an elite esports-style scene not developing, considering the massive incentive created by a $100 million prize pool. (The International 2017, a “DOTA 2” competition, is the high-water mark for an annual prize pool in a single title at $24.8 million.)
But for now, “Fortnite” has succeeded in drawing audiences in a wide range of formats, most of which are sold as a showcase for compelling entertainers who are good at the game, rather than necessarily the world’s best players. At the center of this phenomenon is Tyler “Ninja” Blevins, the most popular “Fortnite” streamer who has 250,000 paid subscribers to his Twitch feed.
Blevins played at the pro-am in L.A. and will anchor an online-only “Fortnite” competition from the 99th floor of Chicago’s Willis Tower in July as part of a new sponsorship deal with Red Bull. In April, Blevins helped open the new Esports Arena at the Luxor Hotel in Las Vegas, where general admission audience members could play against him in the same room.
Epic has said it’s aiming to make the game “inclusive” and has allowed “Fortnite” to be played in a wide range of formats. John Pierce, partner at the brand consultancy Player 2 Studios, said that because of how social and accessible the game is, “every brand I speak with is asking about ‘Fortnite.’”
In further evidence of its broad brand appeal compared to games with more limited possible audiences, “Fortnite” players tend to be younger than other major games, said Jud Hannigan, CEO of Allied Esports International, which runs the Luxor’s Esports Arena.
For now, the consensus is that “Fortnite” isn’t yet a threat to esports businesses that have been funded and built primarily to take advantage of the more rigid structure that has developed around Riot Games’ “League of Legends” and Activision Blizzard’s “Overwatch,” where franchised teams enjoy high barriers to entry and long-term security.
But “Fortnite” has jumped past other games in viewership in less than a year. And would-be sponsors are showing outsized enthusiasm for “Fortnite,” while well-funded team organizations are trying to sell their own sponsorships based on other games.
“I don’t think it’s alarming at all,” Pierce said. “If you think about how ‘Fortnite’ has become an entry point into competitive gaming for millions of casual fans, it’s done the same thing for hundreds of casual brands, meaning brands with marketers who have a causal interest in gaming.”
Sponsorship industry sources said Epic is taking a cautious approach to direct brand deals, ruling out numerous categories. The best way in for brands, experts said, is to sign deals with third-party tournament organizers.
Team organizations such as OpTic and Cloud9 have seen their valuations grow rapidly, heavily driven by the barriers to entry created by the more rigid structures in other titles. But Epic’s more open-ended approach shouldn’t be a problem for those organizations, which are designed to run teams in a wide range of league structures, said Bryce Blum, executive vice president at Catalyst Sports & Media.
“I never expected every esports title over the next 20 years to focus on team-based franchised leagues,” Blum said, noting that the organizations involved in “Overwatch” and “League of Legends” also own teams in games like “Hearthstone,” where individuals compete, and “Counter-Strike: Global Offensive,” where there are dozens of competitions around the world. “It’s not all that different from traditional stick-and-ball sports where you see a wide array of different formats, from the NFL to tennis and golf.”
Ryan Morrison, founder of the player-focused Morrison & Lee law firm, said possible investors should reframe “Fortnite” altogether.
“[Epic] knows what they are: They’re fun, it’s cartoony and goofy, and they’re getting celebrities to come in and play with the pros,” said Morrison, who represents many of the top esports players. “A much better comparison for ‘Fortnite’ is the WWE. It’s not the NFL.”
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