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Fortnite Freemium Model: How it Makes so Much Money

Due to the Fortnite freemium model, you don't need to pay a dime to play the game. The reason Fortnite is making so much money might lie in another facet of human nature: kindness. In this interview with Hacker Noon writer and Microsoft employee, Nataraj Sindam, we explain how the reciprocation effect encourages you to spend money on a free game.

HOW FORTNITE’S FREEMIUM MODEL MAKES SO MUCH MONEY

When I first got into Fortnite, I couldn’t believe that such a high-quality triple-A game could be 100% free. Due to the Fortnite freemium model, you don’t need to pay a dime to play the game. However, many people spend hundreds of dollars on it. For example, a survey showed that on average, most Fortnite gamers spend $84.67 on the game. It isn’t just children either. Interestingly, many of my friends in their twenties and thirties purchase every battle pass and character skin that piques their interest, often spending more than the price of a typical triple-A release. The question is: how does Fortnite get you to spend money on a free game?

To answer this question I spoke to Nataraj Sindam, a Hackernoon writer who recently wrote The Freemium Model’s Reciprocation Effect.

What is your educational and career background?

Nataraj Sindam Profile

Nataraj Sindam

Nataraj: In terms of formal education, I did a dual degree with a Bachelors in computer science and a Masters in mathematics. For the past 6 years I have been in the field of software engineering across various technology applications for different companies like NetApp, Epic Systems (not Epic Games) and currently working for Microsoft

Apart from my day to day job as an engineer, I am a passionate reader and also write frequently on my blog on Medium and some publications like Hackernoon. I also talk about business & tech in my podcast End2end.

 

The Fortnite Freemium Model

Fortnite Freemium Model

The Fortnite Freemium Model – Season 8 Cover

A free-to-play or free-to-use model is not unique to Fortnite. There are tons of games, apps, and other software that follow the same system. The question is, when companies give away their product for free, how do they make money? Nataraj believes he has the answer.

For our readers who may be unfamiliar with the concept, can you briefly explain what the freemium model is?

: In a freemium model, the consumer can use a subset of features in a product for free without any payment. And only if he/she likes the free features and would like to use the premium features the user can start paying for the service either monthly or yearly.

What are the pros and cons of the freemium model?

: The freemium model has a structural benefit for both the participating sides. Video game or software providers can get insights from the potential paying customer, while the customer can use the product without committing to pay for it.

This free model is basically a way to give potential buying customers an indefinite free trial. Numerous software companies like Microsoft, WinRar, and antivirus providers often do this but for a shorter period of time. The reason is simple. If you give people an adequate free option, they are likely to use it. It’s human nature to be drawn to free stuff. If that is the case, the reason Fortnite is making so much money might lie in another facet of human nature: kindness.

 

The Reciprocation Effect

The Fortnite Freemium Model - Nickmercs Spreads Awareness for Prader-Willi Syndrome

Fortnite Streamer Nickmercs Spreads Awareness for Prader–Willi syndrome

Nataraj thinks the reciprocation effect is the reason why people will pay a lot of money for a product that is essentially free. 

What is the reciprocation effect?

: If a person receives a gift or a favor from another person, he or she feels indebted to the person. The feeling of indebtedness makes them more likely to repay the favor at a future instance.

The following phrases represent how this effect ingrains in everyday lives — 

  • Treat others as you want to be treated
  • Give something to get something
  • Always pay your debts back

Are children and young adults more susceptible to freemium models? Or do freemium models attract users of all ages?

: Freemium models attract all levels of users irrespective of age. And the proof lies in the range of products the model is used in. From Adobe and Spotify to Fortnite and Apex Legends the model has been successful in acquiring a variety of new customers.

Furthermore, there are numerous ways companies encourage the purchase of additional features in their products. A great example of this is Spotify. Their free music service is available to anyone with a supported device. However, with the free version of their app, you will constantly be bombarded with advertisements between songs. As well, you have a limited number of times you can skip songs you don’t like. While the app is free, these annoyances strongly encourage users to pay the reasonable monthly fee for their premium version. In the premium version, the ads are completely removed and you can skip songs as much as you like. 

Should You Spend Money on Fortnite?

If you have the money to spend, I encourage you to buy the battle pass. There are three main reasons why:

  1. It is less than $30 USD which is much cheaper than the cost of new triple-A games.
  2. After buying the battle pass, you can slowly accumulate v-bucks (Fortnite money) throughout the season. If you play enough, you will never have to spend real money again. You can keep accumulating v-bucks through the battle pass just by playing the game. When the next battle pass is released, you can use your accumulated v-bucks to purchase it and repeat this cycle indefinitely. 
  3. Fortnite is all about the community. For children especially, Fortnite is the new playground. People will compare what skins and emotes they have. 

Lastly, if you truly love a company’s product and you have the money to spend, you should support them. Showing your support encourages them to improve their services and provide you with something better. 

What do you think about Fortnite’s freemium model? Let us and our readers know in the comments below!

For more Fortnite reading, be sure to check out:
Best Fortnite Settings Used by Pros (PC, PS4, Nintendo Switch, and Xbox)
The Fortnite Glossary: 35 Essential Terms and Phrases

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