I have an old cd-rom case upstairs in my collection of ancient game paraphernalia. The back of the case is black and reads“Ultima Online 2: Coming soon!” This is the part where someone goes into narrator mode and says “Ultima Online 2 is not coming soon.” The game was canceled by Electronic Arts before it saw the light of day. If you do some Googling you will find comments about “company financial health” as well as “a fear it would cannibalize UO 1 revenue.”
I want to talk about the fear of cannibalizing your own revenue. This post is a little bit of a preamble for at least one article about Epic Games, because they are in the middle of transitioning Fortnite into “something else”. There are a lot of questions for what that will be and how that will affect the existing marketplace for Fortnite players.
I think it is important to compete with yourself if you have a successful product. Whenever I have this conversation with people, I like to point out general market share trends for most industries and how the top two companies generally have fifty to seventy percent of the marketplace. I always tell people afterwards that “if you are afraid to compete with yourself, then someone else will always show up and do it for you.” If you think back to early game companies, id Software was clearly a company that was not afraid to compete with itself. Quake and Doom were both top performing first person shooter games. Interestingly enough, even with their success in the marketplace, Epic Games did show up with a credible competitor in the form of Unreal. It does beg the question for how much more successful Epic would have been if some random product manager at id Software was able to cancel Quake out of fear of competing with the success of Doom.
I think that the best companies out there have a willingness to compete with themselves. You can make the argument internally that an “also ran” product will not generate as much revenue as a potentially new one. It also has less risk and may benefit from internal efficiency and marketplace learnings at the same time.
I was going to see if I could find some fancy graphs for current and historical marketplaces with percentage of revenues going to the top two companies in a few different verticals, but apparently all of those require me to sign up to get a copy of the pdf. I already have enough spam in my inbox without signing up for more.
This is an usually small post this week, but I don’t know what else needs to be said on the topic. I am expecting that my follow-up thoughts on the future of Fortnite will be bigly-er. In the meantime, you should consider supporting The-Games-Industry-Best-Person-Of-The-Year Tim Sweeney by going to this clearly-disclosed-Amazon-affiliate-link to buy some hot Fortnite merch. Bonus points if you got the same sponsored link from Electronic Arts’ very own Apex Legends, a filthy competitor to Fortnite.
See you next week!
