Epic Games / Esports / Fortnite / Fortnite Battle Royale / Tencent Holdings

Why RANDOMNESS will be key for Fortnite Battle Royale to remain mainstream

- by Oliver Tse

By Oliver Tse
workingnow88@workingnow88.com
Twitter: @workingnow88

Published on March 24, 2018. Updated March 26, 2018

CARY, North Carolina – Within 6 months after its launch in September 2017, the free-to-play video game Fortnite Battle Royale has swept almost every major industrialized nation in the world with the notable exception of the People’s Republic of China, where it is not yet permitted by authorities. (One would expect Chinese Internet giant Tencent Holdings, which owns 40% of Fortnite Battle Royale publisher Epic Games, to seek government permission to eventually make the game available in China.)

Not only has Fortnite Battle Royale displaced competing Battle Royale video games such as H1Z1 and PlayerUnknown’s Battlegrounds (PUBG), Fortnite Battle Royale has risen to the #1 spot in the world in several key metrics, including viewership on the video-game-centric website Twitch.tv and revenue from sale of optional in-game (mostly cosmetic) items. According to SuperData Research, Fortnite Battle Royale generated $126 million in sales in February 2018 alone.

Several prominent professional video gamers who stream video of their play on Twitch, notably former Halo 3 esport pro Tyler “Ninja” Blevins, former Counter Strike: Global Offensive (CS:GO) esport pro Michael “Shroud” Grezsiek, and infamous video gaming personality Guy “DrDisrespect” Beahm have all decided to “worship at the church of working now” by switching from other video games to Fortnite Battle Royale.

In the case of “Ninja”, he was joined on March 15 by Canadian rapper Drake and NFL Pittsburgh Steelers wide receiver Juju Smith-Shuster in a video streaming session in which they played Fortnite Battle Royale. The session drew over 600,000 live concurrent viewers on Twitch.

Watch Squads with Drake, Travis and JuJu you heard me. | @Ninja on Twitter and Instagram from Ninja on www.twitch.tv

Furthermore, “Ninja” disclosed in a recent interview on business news television network CNBC that he is earning over $500,000 each month from subscriber fees paid by viewers.

March 26, 2018 Update: 28-year-old YouTube video streamer Rubén Doblas “elrubiusOMG” Gundersen of Madrid, Spain organized an invitational session of Fortnite Battle Royale on March 25 with 99 other YouTube video streamers. The video streaming session drew almost 1.1 million concurrent viewers, drawing the reaction of YouTube esports partnership member Alex Rubens.

Professional athletes around the world, as well as U.S. college student-athletes, have also been swept up by the Fortnite Battle Royale craze. Examples:

NBA Detroit Pistons player Andre Drummond:

NHL Toronto Maple Leafs players Frederik Andersen, Mitch Marner and Auston Matthews:

Swansea City AFC (English Premier League) player Tammy Abraham:

RB Leipzig (German Bundesliga) player Timo Werner:

Bayer Leverkusen (German Bundesliga) players Julian Brandt and Kai Havertz:

The latest example was the erstwhile “Cinderella” of the NCAA Division I Men’s Basketball Championship tournament, the 16th-seeded Retrievers of the University of Maryland — Baltimore County (UMBC), which engineered the “upset of the century” by defeating the #1 overall seed of the tournament, the Cavaliers of the University of Virginia, during the Round of 64 on March 16:

Parents and teachers around the world are struggling to control the access to Fortnite Battle Royale by children and teenagers, as many have been overwhelmed by the sudden popularity of the video game, which has recently been ported from personal computers and game consoles (Sony PlayStation 4 and Microsoft XBOX ONE) to mobile devices (Apple iOS for now, with Android coming soon.)

At this point, Fortnite Battle Royale has essentially swept aside every other video game in terms of market share and “mindshare”. Unlike past crazes within the past 15 years such as poker and daily fantasy sports, the Fortnite Battle Royale craze is being driven almost entirely by social media. Conventional media such as “linear” television played virtually no role in driving the popularity of the game.

One key to success: RANDOMNESS

Besides being the most accessible video game on the market with a free-to-play license, one of the other keys to the success of Fortnite Battle Royale is RANDOMNESS. Not only does the playing area (the “eye of the storm”) shrink randomly as each match progress, forcing those players who are outside the “eye” to run toward the “eye” where other players are waiting to shoot and kill them, drops of weapons via balloons and llamas are also random.

This randomness, just like the randomness in poker, neutralizes the edge professional players have over recreational players. The variance caused by randomness is exactly what is needed to drive recreational players to enter poker tournaments according to one of my former industry colleagues in the poker world, World Poker Tour (WPT) executive Matt Savage:

Indeed, the variance caused by randomness in poker (besides the big bluffs seen by viewers on TV) is one of the reasons why No Limit Texas Hold’em Poker tournaments grew rapidly in 2003-2006 before authorities in the U.S. began restricting (and ultimately cracking down on) unlicensed online poker. The prize pool of the World Series of Poker (WSOP) Main Event peaked in 2006 at $82.5 million. No other competition has come close to generating a prize pool of that size since.

There is no doubt Epic Games is developing the software necessary to drive Fortnite Battle Royale as a competitive esport. Some esport organizations have already signed Fortnite Battle Royale players to professional contracts in anticipation of the start of big money Fortnite Battle Royale tournaments.

Some of these pros are already complaining about the randomness in Fortnite Battle Royale and want to eliminate that randomness to turn Fortnite Battle Royale into a game where the fastest and most-skillful players will have a much bigger edge over recreational players, according to esports consultant and former ESPN esports writer Rod “Slasher” Breslau:

“As always, the pro scene knows better than the developers how to make the game balanced,” Breslau said. “The public Fortnite game is not ready for pro play. The random loot and random circle drops do not help the pro experience, but also the randomness is so integrated into the game, if you streamline it, the pros will immediately figure out the best strategies and it still won’t be ideal.”

In my opinion, reducing or removing altogether the randomness in Fortnite Battle Royale would be a serious mistake, as removing randomness will essentially turn Fortnite Battle Royale into glorified “chess”. Recreational players would lose interest in the video game as they know they have little to no chance against pros, and they will move on to the next fad.

That is the fate facing most video games as esports, as these games begin losing player and viewer interest 3 years after launch, evidenced by linear TV ratings erosion of CS:GO and fighting games featured on the ELEAGUE TV program on TBS Network in the U.S. No esports linear TV program in the U.S. has come anywhere close to the 2.4 million viewers ages 2 and over who tuned in to the 2004 World Series of Poker Final Table on ESPN. The most-watched esports linear TV program in the U.S. to date, EA Madden 2018 Challenge on the CW Network in December 2017, drew 653,000 viewers ages 2 and over (258,000 viewers ages 18-49).

Players will always go where the money is

Having been involved in the poker world in 2004-2009, I have experienced first hand the frustration caused by randomness. Yet the variance caused by randomness was exactly the reason that drove the recreational poker players to create the big tournament prize pools, and the pros were willing to put up with the variance for their shot at the big money.

In my opinion, esports will be no different, as we have already seen with the likes of “Ninja”, “Shroud”, and “DrDisrespect”. They will go where the money is and they will put up with the variance caused by randomness.

Honestly, would you enter a video game tournament with no randomness featuring a $100,000 prize pool or a video game tournament with variance caused by randomness featuring a $10 million prize pool?

In order to build competitive tournaments with gigantic prize pools of several million dollars, Fortnite Battle Royale will need to maintain enough elements of randomness to neutralize the edge of professional players in order to keep recreational players interested. This is particularly true of those players ages 10-15, as they will NOT be eligible to compete in certain big money competitive tournaments until they are 18 at the earliest in places such as London or the Bahamas, or 21 in most U.S. states including California and Nevada.

However, maintaining elements of randomness in Fortnite Battle Royale does have a price for Epic Games: regulation of certain types of Fortnite Battle Royale tournaments by gambling authorities.

As we have seen with poker and daily fantasy sports, gambling authorities will regulate those so-called “games of skill” because those games all have elements of chance. Because Fortnite Battle Royale has elements of chance with its randomness, any competitive tournament in which a player has to pay an entry fee or a “buy-in” will be subject to regulation by gambling authorities.

One would expect the Nevada Gaming Control Board (NGCB), the California Gambling Control Commission, and Washington State Gambling Commission (among others) to regulate real money Fortnite Battle Royale tournaments in which players are required to pay an entry fee or “buy-in”.

If Epic Games were to chose to implement an entry fee/”buy-in” business model to build a large prize pool for Fortnite Battle Royale tournament, then Epic Games will need to apply for gambling licenses by itself, or to partner with a land-based casino which holds gambling licenses.

Among land-based casino corporations, MGM Resorts International has been the most aggressive in developing esports as a business, as it has leased space inside the Luxor Hotel and Casino in Las Vegas to Chinese joint-venture Allied Esports to develop the recently-opened Esports Arena Las Vegas, and it rented a theatre at the MGM National Harbor Resort and Casino in Oxon Hill, Maryland in November 2017 to Psyonix Studios to hold its Rocket League Championship Series (RLCS) Season 4 tournament.

One way Epic Games can get around regulation by gambling authorities is to implement the “sweepstakes” business model, in which players ages 18 and over pay a recurring monthly fee to be eligible for “VIP” online tournaments in which players can win non-negotiable prize packages (with no monetary value) to enter land-based Local Area Network (LAN) tournaments.

One example of the “sweepstakes” model is World Poker Tour’s non-gambling Club WPT product, which is authorized to operate in 34 U.S. States, the District of Columbia, Canada, Australia, France, and the United Kingdom. Players ages 18 and over who pay a monthly fee of $20 (after a 30-day free trial period) can play weekly online tournaments to win non-negotiable, non-transferable entries into big money land-based tournaments around the world (players must be at least age 21 to enter those weekly tournaments to win entry into land-based tournaments in the U.S.)

Another tournament business model that does not require a gambling license to implement is the “freeroll”, in which players compete in free-to-play weekly qualifying tournaments to win non-negotiable, non-transferable entries into land-based tournaments in which the prize pool is entirely put up by advertisers/sponsors. Both the World Series of Poker (WSOP) which has a 10-year agreement with Tencent Holdings, and the World Poker Tour (WPT) which is now owned by Chinese mobile gaming company OurGame, use the “freeroll” business model to qualify players for their annual tournaments in the People’s Republic of China at the resort city of Sanya in Hainan Province.

Whatever business model Epic Games chooses to adapt for competitive Fortnite Battle Royale esports tournaments, Epic Games officials will need to make the correct decisions now and do everything right in order to keep Fortnite Battle Royale “mainstream” beyond the typical shelf life of 3 years. The same fate for most video games await Fortnite Battle Royale if Epic Games officials were to make incorrect decisions, as the ultra-competitive video game industry will always have new titles ready to displace the #1 game of the day, as we have already seen with PUBG which lost the #1 spot only 10 months after launch.

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About Oliver Tse

Oliver Tse operated Oliver Tse Management Group in 2006-2009 to secure product endorsement opportunities for poker players and broadcast talent appearing on televised poker events such as the World Series of Poker (WSOP), the World Poker Tour (WPT), and the NBC Sports National Heads-Up Poker Championship. Among his clients were 3 out of 9 players at the 2007 WSOP Main Event Final Table airing on ESPN (including the champion), the first woman to win a mix-gender WPT event (at the 2008 WPT Celebrity Invitational), and the first female sportscaster on U.S. Spanish-language television who made a successful career switch to poker announcing and hosting and became the original “Voice of Poker in Latin America.” Tse’s clients were deployed as brand ambassadors to emerging international markets for poker including Germany, Russia, Brazil, and Mexico. From 1995 through 2007, Tse founded and operated soccerTV.com, an Internet-based marketing business of televised soccer products for clients including ESPN, FOX Sports, and GOLTV. Tse holds a master’s degree in Financial Engineering from the University of California at Berkeley’s Haas School of Business, and a master’s degree in Materials Science and Engineering from Cornell University in Ithaca, New York. Tse currently lives in San Francisco.

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