Fortnite’s generous new creator economy has an Epic catch

Epic Games is changing the way Fortnite creators are paid, and it could have a transformative effect on the ecosystem of the game. Now, 40 percent of all the money Epic rakes in from Fortnite — hundreds of millions of dollars, if not billions — is up for grabs.

Last week, Epic introduced what it calls “Creator Economy 2.0.” Under the new system, Epic will pay out 40 percent of Fortnite’s net revenues each month to creators based on how much players engage with their islands. That means 40 percent of the money Epic makes from things like V-Bucks, its Fortnite Crew subscription, and in-game outfits (like for crossovers like YouTube superstar MrBeast and Resident Evil characters) — all of that goes into the pool.

Fortnite currently generates “billions of dollars a year in revenue from player purchases,” Saxs Persson, Epic’s EVP of the Fortnite ecosystem, said onstage at last week’s State of Unreal event. So even if we assume that translates to just $1 billion in net revenues per year, at least $400 million per year is up for grabs. But there’s one huge catch: Epic’s own in-game islands, including its flagship Battle Royale mode, are also eligible for payouts from the revenue pool. Epic is putting stacks of money on the table, then taking a bunch of them right back.

How big a piece of the pie do creators actually get? At State of Unreal, Persson said that islands made by other creators account for “roughly 40 percent of playtime in Fortnite,” suggesting that Epic not only keeps 60 percent of Fortnite’s revenue, but also 60 percent of the pool as well. But creators might get even less than 40 percent of the 40 percent pool, since payouts will be based on engagement. Instead of straight playtime, Epic will be determining payouts based on whether an island brings in new players (or lapsed ones) and if players come back on a regular basis.

Those metrics, in my opinion, still largely favor Epic’s own islands. The thing that keeps me coming back to Fortnite nearly every day are Epic’s excellent battle passes, which offer things like new outfits as well as V-bucks to spend in the game’s store if you get enough experience through completing quests. The vast majority of those quests can only be done on Epic’s islands, giving me little reason to branch out to something made by a non-Epic creator. It is possible to earn experience in while playing creator-made islands, but those islands typically don’t give as much experience as what you get from a few of Epic’s handmade quests.

Epic will also be using its payouts as “the primary way for Epic to pay for our own game development in Fortnite going forward,” Persson said at the State of Unreal keynote. That’s apparently just for making things like the Battle Royale islands; the other money that’s off-limits to creators is used to fund the development of what Epic calls “Fortnite ecosystem development,” including things like the game’s code, art, item shop content, marketing, and customer support, according to an FAQ. (You may need to be logged into an Epic account to follow this link.) 

How Epic decides those payouts could also be contentious, especially because Epic’s description of the metrics are ultimately pretty vague. (The company also reserves the right to ban islands it deems inappropriate, including Mario Kart clones and recreations of some older Fortnite islands.) The company will be open to criticism about how it makes payouts, Persson tells me in an interview – “our job is to listen to that,” he says – but it’s intentionally not disclosing exactly how it measures the metrics because it doesn’t want to inadvertently introduce the wrong types of incentives.

I also asked about how Epic might expand the battle passes to better incorporate non-Epic experiences and so promote creators other than itself. (The company occasionally does this already, but in this new system where Epic is paying creators based on player engagement, keeping the battle pass Epic-focused could be an unfair advantage.) Persson tells me he expects the battle passes will change to better incorporate work from outside creators, and while Persson didn’t commit to when that might happen, he says that “I think it’s an important question to get a better balance than what the battle pass is doing today.”

Even without knowing how much money is actually up for grabs, creators I spoke with believe the new system will be much better. “[T]hey’ve taken a step in the right direction of compensating creators for our hard work on the platform,” Kasper Weber, CEO of Beyond Creative, which makes custom Fortnite experiences for brands, tells me in an email. 

Under the previous “Support-A-Creator” system, creators never got a dime when you played on their islands or purchased their products from Fortnite’s store. If you wanted to make sure a creator you liked got some cash, you had to know their individual “creator code,” know exactly where to input that code before you bought anything from the store, then actually follow through. Even then, that creator would only get 5 percent of your purchase. That’s why many Fortnite creative studios have had to rely heavily on brand deals for income instead, effectively building virtual worlds just to advertise brands like Verizon, Chipotle, or Balenciaga.

“The Support-A-Creator system was based around content creators and those audiences, and it wasn’t really built for Creative developers,” says R-leeo Maoate, co-owner, CEO, and creative director of Zen Creative. “I think [Creator Economy 2.0] is going to be a much better way for creators like us to monetize, make a living, and incentivize us to make better experiences.”

Other Fortnite creators I spoke to similarly suggested this might lead to better islands for players. “To now have a system that you can directly influence by making a really great game, or if you have a game that players are spending hours [in] or coming back to every day — to be rewarded for that by Epic and see that return monetarily is a big deal for us,” says Boomer Gurney, creative director for game development for Team PWR. (Though, like with the Support-A-Creator system, creators will still need to have earned at least $100 in payouts within a year before they can actually cash anything out.)

These outside groups will now be competing with Epic for the revenue pool, but “in some ways, we’ve always been competing with Epic’s islands,” Gurney says in an email. “As a team that has always prioritized player engagement and the longevity of experiences, we’re excited to now have a revenue system that directly supports these analytics.” They’re also now on a more even playing field when it comes to development; previously, creators could only build islands using Epic’s in-game Fortnite tools, but they now have access to the new Unreal Editor for Fortnite that adds a lot more features and lets creators pull in customized graphics assets. 

Epic seems to hope the move will lead to new types of experiences that aren’t primarily about tense shootouts and complex building. “We want to grow by welcoming creators, bringing in new genres of games and new ways to engage that go beyond the battle royale experience,” Epic CEO Tim Sweeney tells my colleague Andrew Webster. That could lead to a wider audience for Fortnite than it has today. The incentives mean we might get something like Roblox’s mega-popular Adopt Me! life simulator — and if it brings in new players that stick around, those creators will get paid. 

Now that they’ll make money keeping players interested rather than building advertisements for brands, teams like Team PWR and Zen Creative can put more energy toward games that might be more directly focused on fun. The creators I spoke to learned about the new system on Wednesday — the same time everyone else did — and so far, they’re hopeful.

“We really came from not a lot, where you couldn’t really make a living these last few months unless you might have been in the top one percent of creators,” Weber tells me. “I’m mostly just happy to see that it’s moving somewhere.”

Update March 28th, 12:24PM ET: Tweaked a few words to emphasize that Epic’s paying out based on engagement regardless of island, and replaced references to Creative mode with language about creator-made islands.