Business of Esports TV: Ninja and Fortnite Marketing

(Livestream #132)

In this segment, we discuss Ninja earning $5M in a month through Fortnite and how Fortnite’s marketing tactics allow their influencers to make such big numbers.

The Business Of Esports brings you news, debates, and all the information you need to know about the gaming sector, the world’s fastest-growing market. With Paul “The Profit” Dawalibi leading the charge, and a variety of special guests, BoE TV is the only place to find insider information on the esports industry!

Check out the full livestream here:

Paul Dawalibi 1:10:45
Alright, let’s, let’s let’s move on to this last story. This one is a good story to end on, actually, because the numbers here are massive. The headline here, Ninja says he wants made 5 million in a month from his fortnight creator code. The sub headline the streaming superstar cashed in big time. And this was on a live stream, he said it. But basically he revealed that he made 5 million in a single month from the proceeds of this fortnight creator code, which, by the way, allows creators so for those of you don’t know, if you go on fortnight, and you buy something like a $10 skin, you can support your favorite streamer or creator by putting in their Creator code, in this case, ninjas. And they get 5% of that purchase price. So that means if he made 5 million in a month, guys, let’s do the math here. That means people who are ninja fans, right? spent $100 million in that month on fortnight skins. And I my guess is this was not just one month, right? I’m sure. At his peak fortnight, this was probably over six months, right? Like, where the numbers were this big? Are any of you guys shocked by this? Like, is it? Is this? Like, did

Lindsay Poss 1:12:10
he say when this was by chance? Like, like, what time period? I’m wondering if it was in? Okay, well, I was just wondering if it’s in there if it’s important period of having, you know, 180 million monthly active users or whatever, and it’s like, Dad 250 at their peak rate. So it’s, it’s, it’s incredible because it’s obviously less than each user spending $1 but to have that type of conversion of your like to have 50% of your users buying something is nuts.

Paul Dawalibi 1:12:42
I mean, your user spending $100 million on a game right is just is is incredible. In general level of engagement is unheard of. Right like absolutely unheard of. And and is like one of the reasons why he’s completely you know, still in the pantheon of gaming at the at the very top in his ability to engage a community I think at least I was just surprised at how big this single number was right this is not his subscriber revenue ad revenue brand sponsorships you know, mixer deal like this is 5 million a month just from creator code I’m curious how much you guys think that drives people to purchase in the first place if they know it’s going to support someone that they like and are watching

Jeff Cohen 1:13:43
I don’t know if it’s to support I think it’s more like they it’s social signal it’s like you mean they feel good that they’re like helping ninja or there’s the question

Paul Dawalibi 1:13:53
right I want to get into the business mechanism of this right right we think having a creator code system encourages more spend right was this brilliant on ninjas part or was this brilliant on epics part right? Did epic get 100 million in spend? Because you know they created an incentive for ninja here like are people more likely to spend if they know dollars are going

Jeff Cohen 1:14:18
I think it’s I think it’s a win win sense of it’s like affiliate marketing and gambling like yeah the affiliates doing well that sends them to the gambling site but you’re also creating demand that probably wasn’t there like someone is seeing its advertising right like someone is seeing ninja advertise this and then they’re buying it because they see the advertisement are they buying it to support ninja like ninja needs more money? I don’t think that’s the motivation it’s probably like I could get

Lindsay Poss 1:14:43
emotional connection to it though. Yeah, it could be that it could be that like

Paul Dawalibi 1:14:46
so. What I want to get at is like, and this is the direct question let me let me rephrase it, which is there was the of all the people who were watching ninja play fortnight right? Was there even one person Who went and bought a skin? Because he knew ninja would be getting something back as a sequence of him buying them with, did anyone go purchase just because of that

Lindsay Poss 1:15:11
this is this is kind of like a known marketing tactic. And unfortunately, I only know it and like really horrible contexts. So for example, like really horrible, so very sorry, events. But, for example, organizations that were looking to raise money for the Syrian refugee crisis, in 2017 2018, we’re having no success until a photo of a little boy who was like, washed up on the beach after drowning on a ship, the ship went massively viral, and all of a sudden, because people saw a little boy, and they thought, oh my god, that could be my kid. That could be my cousin, that could be my little nephew, whatever, like donation skyrocketed. There’s actually a similar story with the National Geographic picture of children starving in Yemen, and there’s a horrible photo of like a starving child. And anyways, the point is, it’s a very, very common and well researched marketing tactic to build that emotional connection through literally one one point of contact. And so given ninjas, like given ninjas audience and given his connection to especially like younger people, to all the fortnight players, I mean, he built his not his whole career, but a large part of his career. On the right was a really model to them, right? Yeah, exactly. Like he, you know, massive popularity, all that building that one emotional point of contact is definitely something that drives sales. People definitely bought it, because ninja was saying, Go buy this guy’s like, it’ll help me out. 100% like, that’s, that’s a known way to market.

Paul Dawalibi 1:16:41
I mean, Josh agrees with you here. Lindsey says, It’s such a great way for consumers to justify a purchase that they might already be on the fence. Like, I it’s impossible to have this data, right. But the the right geek in me would love to know, like, what percentage, like bought purely because of that, right? Like, how much did it really motivate people to buy? I think is so interesting, but like, it’s the number

Lindsay Poss 1:17:06
three, my friend, go buy this. And when people are gonna go read me Who doesn’t want to, you know, that’s an emotional thing that you build upon. And then Joe did a great job building his audience in that way, making those connections. So I’m not surprised that they then followed up by spending money.

Paul Dawalibi 1:17:24
So for everyone watching, please go buy some business of Esports merchandise, some of the

Lindsay Poss 1:17:36
otherwise horrible things, but this is how I learned about this as an as a marketing tactic. Perfect.

Jeff Cohen 1:17:48
Not sure exactly.

Paul Dawalibi 1:17:50
You can tell before I am starving. Yeah. All right, guys. Is there anything else you guys wanted to talk about? Anything we didn’t cover? Those are all the stories I had for today? A little bit of a short actually not really. We’re about an hour and 20 minutes here. Anything else that you guys Jeff Lindsay that I didn’t cover? Maybe

Lindsay Poss 1:18:14
something you want to talk about?

Paul Dawalibi 1:18:16
Something? Oh, yeah. Let’s talk about that. Because that was interesting.

Lindsay Poss 1:18:23
I liked that. Yeah, I really liked so pragmatic.

Paul Dawalibi 1:18:27
I won’t even bring this up. But let me just give you guys the context. So take two had their earnings call on the earnings call. Strauss Zelnick was the CEO basically said, when when sort of when prompted about sort of the metaverse or someone asked a question related to the metaverse or something. basically said, I’m always allergic to buzzwords, amazing creativity, great characters and great stories, great graphics, great gameplay. That’s what really matters. And so he completely poo pooed the metaverse he completely poo pooed it for the longer version other things like VR ar 3d speculate crypto bags, like he completely poo pooed every hot buzzword on the planet and said, Guys, let’s focus on what really matters here making great gains if I’m paraphrasing kind of genius in my mind. I mean, I don’t know if you guys have a different take on this.

Jeff Cohen 1:19:30
I’m a huge fan. I mean ever I feel like everyone in the everyone in the finance side of gaming is like has a man crush on Strauss to some extent and, and to maybe a lesser

Paul Dawalibi 1:19:41
also just extremely good looking. So

Jeff Cohen 1:19:43
I was gonna say Bobby as well, but that’s, you know, that’s more admiration than a crush. But, you know, he just he sort of has this way of explaining things and cutting right through the BS and he’s had such a distinguished career and enter Tianmen in the finance the business side of these things like you kind of when he gets on the earnings call, you just want to listen and you will pines about stuff like this where, you know, he sort of has no business opining about crypto and specs but I just love that he does cuz that’s much guys does. The only pushback is the only push back to my fanboying is that in the past, Strauss has also been negative on mobile, he’s been negative on free to play he’s kind of been negative on you know, a number of other different areas in the gaming space that he’s

Paul Dawalibi 1:20:33
showing. In other words, he’s right about everything

Jeff Cohen 1:20:35
proven wrong in some areas, or at least had to block back some of the things like that you know, they have gotten bigger and mobile clearly for triple A franchises do work on mobile, Activision, prove that. So, you’re not invaluable, but he’s right. Most of the time, like he you know, he was I give him so much respect, like when every executive on the planet and all these gaming companies in 2018 was talking about cloud and subscription how this was the future we these were SAS businesses, it was a subscription model. He was the only you know, the only one kind of being like, Guys relax like the TAM, just cuz you don’t need to buy a console doesn’t necessarily mean we’re going to get another billion gamers like there’s there’s no evidence out there that there’s a billion people that want to play games. But the only thing stopping them is buying a console like did just there’s no evidence of that. And he was proven, you know, largely exactly right on that. So, yeah, I was a long winded response, but I just I think he’s incredibly wise and I listened when he talks.

Paul Dawalibi 1:21:42
Lindsey, how do you feel about the anti buzzword? comments here?

Lindsay Poss 1:21:48
I mean, I love that Jeff heroes The old man yelling at Cloud guy.

fanboys?

Paul Dawalibi 1:22:00
Yes, I am. selmak fanboy. He the guy’s brilliant and

Lindsay Poss 1:22:04
very accomplished was a joke about him yelling about the mobile market and all these other things. In fact, both of you are old man yelling at clouds

Jeff Cohen 1:22:14
yelling at the cloud. Yeah.

Paul Dawalibi 1:22:18
That’s true.

Lindsay Poss 1:22:20
Um, no, but I, whenever these words catch on like this, it drives me bonkers. So I understand what he’s talking about too. And we’ve talked about this before, like, What even is the metaverse nobody’s gonna, like wake up one day and be like this. But like work? It’s a silly, it’s a silly thing to focus on. To me. It’s Yeah, I don’t know. It’s part of the overall development of the gaming industry. And we’re gonna keep talking about the development of the gaming industry, whether we call it the metaverse or not.

Paul Dawalibi 1:22:42
Yeah, I agree. It’s great. I mean, you put it so perfectly, I think it would just, which is why I agree with him, right. It’s not that I think we should just stop using the word metaverse, or we should stop. You know, trying to get to that, you know, holodeck future metaverse future. But what I love about stress is is just like, and I think what’s made him successful is let’s cut through the crap, let’s focus on the business. Let’s focus on the games, let’s focus on the things that matter, right not on chasing the next big thing chasing the hype, chasing the fancy announcement chasing right? Like, it’s let’s let’s just, and he’s been successful, because he just executes and he delivers. You know, if he says they’re gonna make great games, they’re gonna keep making great games. And that’s why I think there’s so much respect for him in the industry, but also even outside the industry, right, like in entertainment broadly and in finance, broadly. People people listen, when he speaks. Christian says, where’s the professor Christian, he had some personal things. tonight. I’m sure he will be back either next week, or very, very, very soon. Josh says, and by the way, he will be on the podcast. So not to worry he just couldn’t do tonight. Josh says does he mean that there can’t be any overlap?

Jeff Cohen 1:24:03
Which area?

Paul Dawalibi 1:24:06
Yeah, that’s a good question. But like, I guess I if I’m Josh, if I’m reading into your question is the question like, can you have all the buzzwords but still also have all the focus that he’s talking about? Is that was that sort of the question? I don’t know if you interpret it that way. Jeff.

Jeff Cohen 1:24:25
There’s nothing inherently wrong with the buzzwords I think he’s point was like the focus on that versus executing on what take two is supposed to do, which is it was incredible games that are exciting, fun entertainment experiences that sell really well and make profits and revenue. You know, it’s, that’s what their businesses and even had a point about the metaverse where it was sort of something like, you know, what even distinguishes that like some would argue that GTA is quote, unquote, a metaverse. I mean, you have Google meeting up in there every day, spending hours hanging out with their friends, like, you know, death, like doing things they couldn’t do in the real world shooting people killing people, whatever. That kind of is the sort of ish definition of the metaverse, you know, and I think he made a joke like, oh, could we host our conference calls in GTA? Sure. But what would be a practical purpose of that? Like, it’s so much more efficient to do it here. And it’s like, I kind of respect that. It’s like, you know, we will get to that metaverse future but we don’t need to pretend that everything is what it’s not and chase that shiny penny.

Paul Dawalibi 1:25:37
But by the way on this topic, like there was another story which I didn’t include, but it was about Roblox that came out of the epic Apple lawsuit, where they don’t call their things games anymore. Like the little like the games that you play in Roblox. They’re now experiences. And to me, that’s where like, I draw the line. It’s like Okay, guys, come on. Mike.

Lindsay Poss 1:25:57
I know you want the same thing though.

Paul Dawalibi 1:26:00
Like I know you want to be a metaverse, but let’s be Let’s be This is not like robots not

Jeff Cohen 1:26:05
a lot of money so that I mean, they all these mobile games should call themselves experiences if that’s all it takes to save 30% of revenue. True.

Paul Dawalibi 1:26:15
A weird loophole If yes, me But

Lindsay Poss 1:26:18
yeah, I’ve done that.

Jeff Cohen 1:26:24
Turns out take back a lawsuit fortnight is now here’s our giving us our money.