Epic Games’ Epic Game Plan


Fortnite is best known for its ability to convince many rivals into cooperation (or “interoperability” in the early days). Fortnite is compatible with all major entertainment platforms – iOS, Android and PlayStation. It allows cross-play across multiple identities/account systems as well as payment methods. Social graphs are also allowed. The major gaming platforms resisted this for years as they thought it would reduce their network effects and make it more difficult to purchase their hardware. A friend who had Call of Duty could not play with a friend who had Call of Duty, even though Sony and Microsoft both knew they wanted to.

It is also unusual for IP owners not to allow their characters or stories to be interwoven with other IP. It does occasionally happen (e.g. There are many Marvel v DC comic book and video game crossovers. It’s rare for it to cross over in an experience they do not control editorially.

It is important to emphasize the organic evolution. These parties will never accept interoperability nor entrust their IP if you declare your intention to create a Metaverse. Fortnite is so beloved and unique that most counterparties are forced to join the “game”. It’s not like P&G cannot say “eh, Facebook’s not for us”. Fortnite has become too valuable a platform.


Epic is also providing a viable on-ramp for its efforts to build the Metaverse. Epic Games is the owner of Unreal, the second-largest independent gaming engine. It has thousands of games running on its “stack”, which includes software and tools that make it easy to share assets, integrate experiences and share user profiles. Epic’s gaming engine is so sophisticated that it powers many traditional media experiences. Disney’s The Mandalorian was shot in Unreal. Jon Favreau, the director, was able to enter the digital sets to position characters and frame shots. The majority of the assets and environment can be explored by anyone, including Disney. Unreal is also being used more often for live events outside of film and television. Unreal powers Fox Sports’ NASCAR series, for instance.

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The Metaverse is still. It requires that everyone be able create and contribute content and experiences. This does not only apply to well-staffed companies or technical skilled individuals who are trying to make movies or games. Epic purchased Twinmotion last April to achieve this goal. The company’s focus was not on VFX artists or game designers but rather on providing intuitive, icon-based software that allows “architecture, construction and urban planning professionals” to create immersive digital environments based on Unreal “in seconds”. Epic Games CEO Tim Sweeney stated that means there are three options for creating in Unreal. These include the standard engine, Twinmotion (which is more visual and simple), and Fortnite Creative Mode, which is suitable for people with little or no programming or design experience. Each option will become more powerful, simpler to use, and more integrated over time.

Epic’s “Online Services” suite is another important component of its offering. This allows developers to support cross-play across Sony+ Microsoft + Nintendo+ PC + iOS+ Android, and leverage Epic’s account systems/social graph (which currently has 1.6B players connections). This isn’t a unique offering. Microsoft bought PlayFab for $400MM and millions more to support Xbox Live. Amazon purchased GameSparks, GameLift and GameSparks to provide services to online game developers who need many servers and tools to make their online games work. Although Valve does not offer server infrastructure, its Steamworks solution provides match-making and account services free of charge to developers — but only for Valve’s core business, the Steam Store. This is Epic’s approach to Online Services. Epic does not charge, unlike other market leaders. It is also free for any engine, platform, or game. It works at the same scale as Fortnite‘s players network, which allows any title to use the largest player graph in the world to help them grow their userbase. Although there is value to such an offering, Epic believes it is more valuable if it is free. It extends Epic’s already large social graph, makes it easier for more games “talk to” each other, and allows players to seamlessly move from one experience to the next. This also reduces Epic’s dependence on Fortnite for building the Metaverse. Epic Online Services, which are still in private beta and will not be made public until Q2 2020, have been suggested by the company to support “hundreds of thousands of games” in 2020. This all decreases Epic’s dependence on Fortnite for its long-term efforts in building the Metaverse.

Epic also has a digital game store that is the largest, though still small. This means that Epic players have access to a variety of digital content and experiences. Few people were looking for more digital content fragmentation, while most were happy with the market leader Steam. Epic Games CEO Tim Sweeney is vocal about the fact that digital content sales are currently subject to a standard 30% commission (e.g. Not only are they usury, but they also prevent the creation a true digital economy. Imagine, for instance, that credit card fees were not 0.5-2.5%, but as high as 60-20x. This would mean that entire sectors of the physical economy (such as grocery stores or coffee shops) wouldn’t be possible to operate. Epic charges only 12.5% (which also includes the 5% Unreal license fee), making it only 7.7% for many customers. Rumours persist that Sweney tried to negotiate lower fees, but settled at 12% with his board – an amount he admits does not always cover operating expenses. However, this doesn’t necessarily mean that there isn’t an overall business. While operating a storefront will undoubtedly help build the Metaverse, Sweeney seems to be more focused. He openly urges Google and Apple to match Epic’s rates, as they generate many thousand times more revenue than Epic’s store.

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