Fortnite’s Platform Problem (It’s Not What You Think)

Well, I I wrote a piece this week calling it almost like the anti-platform. Fortnite is really good at building this incredible licensing empire. And what we're looking at right now is just a series of IPs I pulled. Nothing in particular, just a random sampling of IPs, as well as how hard it is for a lot of these games to get these IPs. So to give you one example, Ferrari has been notoriously hard to be able to secure as a license because there's a lot of requirements that Ferrari requires on for instance whether or not the Ferrari could be shown crashed as one example. James Bond notoriously hard to be able to get a hold of. You will see post Amazon how easy it is. But it sounds like James Bond is coming to Fortnite. It also sounds like Harry Potter, by the way, is coming to Fortnite. They've been able to get a lot of top tier IP that other games wouldn't be able to get. They've kind of like sucked up all of these huge IPs and when you compare it to what we'd normally think of as a platform, it almost is the

anti-platform, right? It's not as though these things are standing on top of it. It's sucking everything in around it. And when we go back and look at the Fortnite GD numbers, I think it is just really a testament to this still being the case that they still haven't quite built the platform. So, if you look at this huge spike here, which is the season 6 or excuse me, the the new chapter launch, the chapter 7 launch, they got to around 9 million concurrence, which is way way above their prior high over the last couple months where it was around 2 million has been their daily peak. But when you look at UGC maps and where their CCU are, they're not having the same increase. Of course, that's because the map premiere, the map that all the players were on is an Epic provided one. But again, they're not seeing all this uplift on the UGC UFN maps, which again speaks to the problem that they're not really building a platform yet. So, they still have the licensing. It's really just pulling this whole kitten kaboodleoodle together, is them continuing to nail all this stuff, but it's not translating to the UFM platform yet. And I think that's kind of been their challenge.

What they did do on that point that was super cool was that during the zero hour event, which is basically like Avengers Endgame, there's a moment where all of the collabs show up. So you've got everything from Avengers, Homer Simpson, Godzilla, Mortal Kombat, Squid Game, Power Rangers, Megazord, Superman, Kill Bill, K-pop Demon Hunters was actually part of this as well. So all these characters um pop in. They also for the first time featured some of the UGC or UEFN creator characters. So I don't know if you guys know FOD, I think that's the future trash team. So some of the most popular UGC islands, they have their own characters. Those showed up as well. So that was a great nod that Epic and Fortnite were giving to the entire ecosystem saying for the first time like, "Hey, we're all in this together." So I think that's a great sign that they're moving in a direction to really bring all the UGC people into the fold.
This is from the ARM investment banks

presentation. They had concurrent users on major UGC platform and the size of Roblox compared to Fortnite and compared to Steam is astonishing. If you're not seeing the graph, you're you're listening to this. Roblox peaked at 21 million concurrent users, whereas Fortnite is peaking somewhere along three million concurrent users. So, this is quite of a interesting graph. Phil, you had some take on this?
I mean, look, I think if I were to play the Eric Crest card, it's like, what's our poo? Where's the money? Roblox still has a ton of users, but again, $20 per month per player and there aren't many payers. Like, that's always been the problem. I would take three million Fortnite players over 20 million Roblox players [laughter] in a goddamn day, dude.
Really?
Oh, yeah. Because they're actually spending money. So, like, you know, CCU, MAU, downloads, all this stuff is like total vanity metrics and they only matter when the hype cycle is high, right? When the stock market's going up and everyone's all excited about user

base. At the end of the day, when the rubber hits the road is how much money you're making per user, right? And so,
that's Arpdow.
ARPD revenue per user. whatever conversion all these metrics like Roblox is like a third world majority platform right so it's irrelevant how many are playing in India or Pakistan or whatever it's like it's irrelevant right so anyway I
well
yeah yeah I think they make almost 5 billion Roblox in 2024 I I would assume they're over five billion this year add little ads little crazy games into it and it'll be
I'm not suggesting that Roblox is not a great platform and it's doing quite well for itself. I'm saying when you're comparing CCUs, you have to actually understand what the revenue is the nom numerator, not the denominator on these users.
I get your point. I get your point. I agree.
And I don't love CCU. Uh I agree with that. I like DAU a little bit more, but it does show trends. It does show the interesting change in taste that many of

the audience have. But absolutely, you know, for what we do from the business side, you also care about
on the positive sides of this big jump in CCUs, it is games like Grow a Garden that actually monetize reasonably well, right? Like these are really egregious like you know monetization methods. So that's actually good because a lot of the games that have high CCUs historically have been games that don't monetize extremely well.
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