'Fortnite' and other free games raked in more than $87 billion last year, and the rest of the gaming industry is starting to take note

  • Free-to-play video games generated $87.7 billion in revenue during 2018, according to a new report from research firm SuperData.
  • Asian players account for 62% of spending on free games, and seven of the top 10 grossing free-to-play games belong to Asian publishers.
  • "Fortnite" was the top grossing game of 2018, free or otherwise, with an estimated $2.4 billion in revenue.
  • Revenue generated by mobile games ($61.3 billion) exceeded the combined earnings of games on traditional video game consoles ($12.7 billion) and PC ($35.7 billion).

Led by "Fortnite: Battle Royale," the free-to-play video game market surged to $87.7 billion in revenue during 2018 — more than triple the earnings of blockbuster games released by major publishers last year. In fact, free-to-play titles accounted for nearly 80% of all spending on digital games in 2018.

That's according to new research out Wednesday from Nielsen's SuperData tracking arm, which measures data from the gaming, AR, and VR markets. 

SuperData found that games played on smartphones account for an increasing majority of play time, and free games still rule mobile app stores. Case in point: "Fortnite" remains the most popular game in the world at the start of 2019, enjoying more than 80 million active users per month.

Read more: Fortnite made $318 million in May — almost $100 million more than any free-to-play game has made in a month

Free games like "Fortnite" earn revenue through microtransactions, usually in the form of small purchases that boost a player's performance or reward them with a special item. Those incremental purchases add up to big spending: mobile games earned $61.3 billion in digital sales in 2018, while games on traditional video game consoles and PC earned $48.4 billion combined. 

Free-to-play and mobile games are especially popular in Asia; SuperData reports that 62% of all spending on free-to-play games comes from the Asian market. Despite China blocking the release of new video games in the country for most of the year, the Asian mobile games market managed to grow by 18% during 2018, compared to 13% growth for mobile games in North America and Europe.

In fact, seven of the top 10 grossing free-to-play games belong to Asian publishers, with the exceptions being "Fortnite," "League of Legends," and "Pokémon Go." "Fortnite" earned more than any free-to-play title in 2018 with an estimated $2.4 billion in revenue, spread between releases on PC, mobile devices, and all three major video game consoles.

Superdata Chart Top free to play games
The top 10 grossing free-to-play games, according to SuperData.
SuperData

SuperData reports that 34% of American players invest in "Fortnite" battle passes, seasonal subscriptions that offer rewards in exchange for real-life cash or in-game currency. The battle pass costs about $10 and a new pass is released every 10 weeks.

"Fortnite" players can also purchase "V-bucks" to exchange for items in the game; the in-game currency ended up on thousands of wish lists during the 2018 holiday season.

While free-to-play games are mostly associated with mobile and PC, "Fortnite" has helped make the trend more popular on consoles. According to SuperData, free-to-play console games saw a 458% increase in revenue in 2018, driven primarily by "Fortnite," making it the fastest-growing model of digital video game. (The popularity of "Fortnite" had other benefits for console gamers, too: In 2018, Sony began allowing cross-play to let the massive free-to-play community connect across different platforms.)

Free-to-play games even eclipsed blockbuster video games from major studios in 2018. Digital revenue for "premium" games totalled $17.9 billion last year, but that's less than a third of what was spent on free games.

Plus, they find the vast majority of their audience in the West. According to SuperData, North America and Europe account for 80% of all spending on "premium" games. Customers are also trending towards more digital purchases for high-quality games, rather than buying physical copies.

Though video game culture remains focused on big releases, revenue reports show the industry trending towards more free releases and "games as service" models like "Fortnite." With the mobile market generating more revenue than traditional gaming platforms, game developers will continue to explore how to best capitalize on the mobile audience.

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