Network and Cascade Effects in Battle Royale Video Games
Battle royale mode is the latest phenomenon in video game culture, with game development studios rushing to get their own battle royale out in hopes of dethroning Epic Games’ “Fortnite” in hopes of cashing in on the millions being made weekly in the genre. Electronic Arts (EA) might have just found their money-printer in Apex Legends. It is being dubbed the “Fortnite killer,” although it’s too early to tell if that is the case, but it is without a doubt its biggest competitor to date after having risen to the challenge among the dozens of other battle royale games in the market. What exactly is it that makes these games so profitable? After all, they’re free to download, so it can be difficult to imagine where any revenue could possibly come from.
The answer is microtransactions, and, get this: it’s purely aesthetics. None of what the in-game stores offer gives the gamer a competitive advantage in the arena. Rather, users are spending their money on things like skins and dance-moves for their characters in order to set themselves apart from other players. The key in all of this is establishing a player base early on. “You get that installed base in there, and you really get a network effect where revenue from the game could be exponentially bigger,” says Shawn Cruz, senior trading specialist at TD Ameritrade (1). “You get the initial adoption, and what you have to do is turn that into a stream of cash flow.”
To establish this player base, EA paid gaming influencers like Ninja and Dr. Disrespect to be the first in playing Apex Legends live on Twitch to build hype for the new game and create a cascade effect around the world. Given how well connected they are in the gaming community and how many millions of followers some of these influencers have, their behaviors were quickly replicated by gamers all around the world, hitting 1 million total players in 8 hours, 10 million in 3 days, and 25 million in a week (2). You don’t even have to be a follower of these influencers; as long as one of your gaming friends is, they will adopt the influencer’s behavior, and you will soon follow.
As people began to notice player-counts rise, more and more followed by downloading the game. Getting that initial adoption is what has been the struggle for countless of other battle royale games. Smaller player bases for games discourage others from downloading the game, since battle royale modes usually involve over 50+ users in a lobby playing concurrently. So the more gamers that are playing a specific battle royale game, the more value that is added to the game itself, both through player experience due to having so many other players playing the game and contributing to this cultural phenomenon, and through revenue for the game studios that are able to reinvest that money into improving the game continuously and give players more unique microtransaction options.
Sources:
- https://www.benzinga.com/analyst-ratings/analyst-color/19/02/13211172/a-network-effect-new-model-for-video-games-relies-on-in
- https://www.forbes.com/sites/insertcoin/2019/03/04/apex-legends-just-hit-50-million-players-in-its-launch-month-far-outpacing-fortnite/#716f1b4f4d5c
