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Marketers be warned. Don’t mention in-game advertising to Epic Games boss Tim Sweeney. He does not care for it, and has no plans to move into the ads business.
To him, the idea of an in-game billboard for a fizzy drink brand is antiquated — it intrudes on the gaming experience rather than adds to it. He would rather marketers show up in his games in ways that enrich those experiences. This could be playing as their favorite superhero or being able to wear their favorite sneaker brand on an exclusive level.
Ultimately, it comes down to getting to a point where marketing in games is ad free, not brand free.
Epic’s recent announcements at last week’s Game Developers Conference make that all too clear. The new developments include Unreal Engine for Fortnite, a new toolset that helps players make deeper experiences in Fortnite Creative, and the Fab marketplace, a gigantic catalog of high quality digital assets, as well as the Creator Economy 2.0, which gives 40% of revenue from Fortnite Creative and Battle Royale to in-game creators. It’s a sandbox of new tools for any marketer thinking about how their brand might exist in a game.
Digiday sat down with Epic Games CEO Tim Sweeney and executive vice president Saxs Persson to learn about how these new developments could impact the role of brands, creators and ads on the platform.
The interview has been edited for length and clarity.
Do you believe advertising has a role in Fortnite’s future, or do you think the current model is robust enough to handle the challenges of the market?
Sweeney: I hate advertising in games. The best moments in Fortnite have been other brands entering the world of Fortnite – fashion companies, the Ferrari dropping into the world, Marvel and Star Wars crossovers. I think brand presence is a much healthier way for companies to get involved in the metaverse than advertising. Playing an ad is just annoying. Players hate it and they aren’t very engaged with that content — whereas, give them a drivable Ferrari or a cool shirt they can wear, and they love it.
There is a wealth of opportunity there for all these companies that have previously advertised to do partnerships with creators and to create crossovers of all sorts. Branded islands, branded concerts which incorporate these brands in fun ways that players actually like, as opposed to displaying advertising to play some stupid video. That’s not fun.
We’re not in that business at all. Epic is not in the advertising business. We are operating an ecosystem that doesn’t let people do the bad things that are found elsewhere. Within the world of Unreal Editor for Fortnite, Verse [Epic’s new coding language] doesn’t expose a way to get player data. That’s a really important part of the player experience. It’s a place for having fun.
Do you think there is any other option for advertising in Fortnite? Or Rocket League or Fall Guys, for example?
Persson: For Fortnite, no.
Sweeney: You have billboards on the stages in Rocket League. I think they should be true to the real world and not feel intrusive into your game playing experience.
If that’s the only option, then how do you scale those native integrations within Fortnite?
Persson: Brands do it themselves. We don’t do it. We have clear commercial practices of what creator teams are allowed and not allowed to do, and they make their own experiences.
If a brand wants to do a product unveiling in Fortnite because we have an audience that fits better than anything you can find on TV, then they can. It’s not our work; it’s not our initiative. We just have the rules and regulations for what you can do in the ecosystem.
How imperative is it for Epic to roll out more direct virtual commerce opportunities inside Fortnite and other virtual platforms?
Persson: If we found a way that would fit players’ interest, then maybe. But that’s not the plan. The direct economy is a tricky one because I don’t know of a way to stop that wave once you start it.
Sweeney: It depends largely on what they’re selling. If you’re selling a ticket to an awesome experience, then that’s the whole model of the game business. That’s great. If you’re selling loot boxes, then no. We don’t like that. If you’re selling people a gameplay advantage, then that’s pay-to-win, and we don’t want that.
We see Fortnite as an opportunity to build a better world that’s free of the race to the bottom that’s driven mobile gaming to where it is. The key problem in the mobile ecosystem is that user acquisition is completely advertising-based, and the companies that have the worst consumer practices with pay-to-win and loot boxes make the most money from the consumer, so they’re able to bid the highest amount on advertising. So all the top games driven by all the top advertising are really bad games. We very much don’t want that world in Fortnite.
Persson: The next stage of our growth doesn’t require direct purchases. But if the next Star Wars movie wanted to premiere in Fortnite, and they wanted to sell a ticket on premiere night, and that’s where you went to watch it, that seems like a good value for players.
Do you see any issues with copyright popping up with the increase of branded experiences in Fortnite? If a brand were to create an ‘official’ set of branded assets, how would you handle individual creators creating ‘knock-off’ versions of the same experience or asset?
Sweeney: There’s an entire legal framework behind copyright enforcement that we adhere to. The DMCA [Digital Millennium Copyright Act] process is a part of it. We’re also looking at more direct ways to help realtors resolve disputes among themselves if we can be of help there. We aim to have a high quality ecosystem that isn’t just a dump of infringing content. Because it’s open to users and one company like Epic can’t know all the copyrighted content in the entire world, there will be times that users release something that’s infringing and we hear about it from the creator and we take it down. That’s the imperfect, but best-known way of doing that.
Why have the brand collaborations on Fortnite worked so well to date? Is it because they’re conceived more as something that seamlessly ties into the game and not a typical ad format? Do you see that becoming the norm for in-game advertisements?
Persson: Technically, it’s advertising when you play as Iron Man — but that’s not why it was fun. It’s wish fulfillment. It happens that Fortnite is a great sandbox for wish fulfillment. When we get the balance right, it’s fantastic.