UGC: how Fortnite (& Roblox!) are leading the next wave

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[The GameDiscoverCo game discovery newsletter is written by ‘how people find your game’ expert & company founder Simon Carless, and is a regular look at how people discover and buy video games in the 2020s.]

We’ve got gas in the tank (or more appropriately in this EV car-led era, electricity in the battery?) And we’re back to provide you more insight into vidya games and how people use platforms to find them - today soundtracked by Charles Webster.

Oh yeah, and there’s one week left for 30% off access to our GameDiscoverCo Plus subscription - our best deal of 2023 so far. (We’ll have some exciting upcoming expansion announcements around the Plus offering next week, by the way.)

User-Gen Content & the Fortnite Creative effect..

The recent announcement that Epic is pooling 40% of Fortnite’s net revenue for both first and third-party creator content, alongside the roll-out of Unreal Editor for Fortnite, is a milestone for the evolution of UGC (user-generated content) for PC/console games.

Sure, plenty of other games have UGC. But by GameDiscoverCo estimates, Fortnite is still the #1 game by DAU on both PlayStation and Xbox ecosystems - and very high on PC, too. Alongside Roblox and Minecraft, it now represents the trifecta of ‘massive games that actually have an active, monetizable UGC scene’.

So when we wanted to talk about these large-scale UGC trends - some might say ‘the real metaverse’ - we reached out to Josh Ling of Metacrab. Josh was director of biz ops for Uplift Games, creator of Roblox smash Adopt Me, and also co-led the dev team for famed Minecraft server/UGC host Hypixel. And here’s what we talked about:

How big a deal is the rev share announcement on Fortnite Creative? Are we seeing a lot of Roblox & other modding and dev teams running (not walking!) to start making content for it? Or do you think Epic-created levels will still dominate long-term?

Josh: It’s a big deal. Fortnite is a money printer, and Epic committing 40% of that printed money back to creators is a huge sign of faith from them in UGC content's ability to drive engagement and revenue, long term. 

While lots of Roblox devs are considering (or already create) Fortnite content, for most it’s a “wait and see” situation. It’s hard to know how much time to dedicate to learning a nascent platform when the payouts on Roblox and Minecraft and elsewhere are already locked in. But the hype is there…

While Epic-developed modes like Battle Royale will always be hugely popular, I think they’ll quickly find themselves outpaced as they compete against their own community to create content players want. Trust me, nothing beats 10,000 people making 100,000 weird things for a million people just like them.

How much do you expect big, deep new games to be created for Fortnite Creative - vs. just new maps and novelty ideas? Do you think the breakout ideas will come from amateur teams or pro devs?

Josh: UEFN’s promise is huge, but the tooling is currently underbaked. It’s missing major systems like data persistence and input control. Epic’s roadmap promises these features and more, and once they ship we’ll see a much wider variety of games covering all sorts of mechanics and genres. But for now it’s mostly reuploaded Quixel Megascans you can build a fort around. 

On Roblox, it was mainly amateur teams that succeeded at the start, right?

Josh: There are several non-native companies, some investment-backed, taking Roblox seriously. But the platform as a whole is still skewed towards native developers who grew up on the platform.

Some of those ‘on-platform’ devs have formed professional studios, with serious offerings. While it’s possible to do, I think it’s quite hard for outsiders to make original, engaging content for insider audiences they were never a part of.

You were involved with Adopt Me for a good while. And I noticed that even a few years after it started, the game is still in the Top 10 for most-played Roblox games - How much do the most-played Roblox titles change?

Josh: The top 10 list on Roblox does shift around a lot, though there are some constant entries. Games like Adopt Me! and Brookhaven have been popular for years. Others have blown up, had their moment, then faded. In that sense it’s no different from the mobile or Steam charts…

There have been a couple new additions to the list recently, games like [horror title]Doors and [‘donation game’ originator]Pls Donate that are fresh experiences. And some older games experience newfound popularity, like Blox Fruits - which was created in 2019, but blew up in 2022 and is now regularly a top 2 game. It’s hard, but possible to break in - and the content mill is fickle everywhere.

Do you see other game platforms coming along to threaten the reach of Fortnite, Minecraft and Roblox and also offer ‘creative mode’ options? (Seems like platforms like Core and Dreams have concentrated on the creative part, but failed to get the users on board.) 

Josh: Short answer - no. Long answer - no, but.. there are many competing platforms trying to do UGC plays. Many have great tech, experienced teams, cool propositions. Almost none have large playerbases. Everyone is struggling to answer the same question: where are the users coming from?

Minecraft and Fortnite were massive international phenomena before they became platforms. Roblox has a 19 year headstart. And all three have millions of dedicated players. How do you compete with that?

Dreams had great content and some best-in-class tooling and it’s being shuttered. It’s not impossible for a new platform to spring up: I would love that! It just seems more likely that a new, popular game would pivot into becoming a platform, based on precedent.

What has most surprised you about the UGC/'creative mode' scene over the last couple of years?

Josh: How little the wider games industry understands about UGC in the form of Minecraft, Fortnite and especially Roblox. There were 8 million peak concurrent players on Roblox last weekend. The 2 top Roblox games regularly have half a million [CCU] each.

I think most people think these platforms are undercooked, and I get it: Minecraft is block punching, Fortnite is Naruto hitting the griddy, and the average Roblox game has the aesthetics of a Lego game on PS2. But these are real platforms with real players - real toolsets that offer real value. Roblox’s IDE is closer to Unity than it is to Scratch or Twine.

And are there big trends you would point to in UGC in the next couple of years?

Josh: Horror games are on the rise again: it’s Five Nights at Freddy’s round 2. Expect more jumpscares and monsters borrowed from SCP. Also, brand and IP integrations are really picking up speed, as marketing managers desperately try to connect with consumers who have adblock installed.

And if I had to make a big swing: a large decline in “Web3” related Metaverse evangelism, as people realise you don’t need crypto or NFTs to make a UGC games platform, oops! Time to evangelise AI instead!

Nintendo: ‘Good day, Sir!’ (to Switch hardware)?

In order to interpret Nintendo’s latest quarterly results, we firstly turn to that noted financial analyst, Willy Wonka: “There's no earthly way of knowing… Which direction we are going… Yes! The danger must be growing… For the rowers keep on rowing… And they're certainly not showing… Any signs that they are slowing.”

Which is to say - Nintendo is trying to get its Oompa Loompas to row faster, but with aging Switch hardware, the numbers are starting to slip: “Overall net sales declined 5.5% to ~ $11.82B. Operating profit dipped 15% to ~ $3.73B.” Still - it’s still the third-best annual results since 2011, and beat expectations.

To get an idea of overall Switch hardware performance & install-base: “Nintendo Switch lifetime unit sales are now 125.62 million, after shipping 3.07M in the quarter ending March 2023. This means it reached 17.97M in the fiscal year, slightly missing its updated guidance of 18M. Nintendo has set a 15M target for the fiscal year ending March 2024.”

So why did Mr. Wonka say ‘directionless’? Well, Nintendo announced alongside the results that it “does not expect to launch any new or upgraded Switch hardware in the coming financial year, set to end on 31st March 2024.” And Nikkei has a report that “development for Nintendo's new console seems to be progressing well. But a product launch won't happen before next spring at the earliest.”

So after the launch of Zelda: Tears Of The Kingdom in two days, we’re in that weird ‘lame duck’ period. We’re waiting for the new hardware, and major first-party games may be held over for it - but we don’t know anything about it. (And if Nintendo goes to usual form, many third-party devs will be informed late in the pre-launch cycle.)

You could argue the Switch’s successor is launching ‘late’. But the counterargument is that Nintendo has neatly avoided the terrible post-COVID supply chain issues that have stymied PlayStation and Xbox. And the incremental upgrade of Switch OLED was far less risky than sourcing a whole new device from scratch.

And of course, in the meantime, players will just buy… more first-party Nintendo games? Extraordinary stats abound for Nintendo games on Switch: “3 games over 30m units; 7 games over 20m units; 18 games over 10m units; 60 games over 1m units; More than 75% of published games are million sellers.”

For the newest batch of first party games? Incredibly pleasant numbers for sell-through and shipped, too: “Pokemon Scarlet/Violet - 20.7m (1.4m in transit/on shelves) • Splatoon 3 - 10.2m (470k) • Nintendo Switch Sports - 9m (600k) • Mario Strikers: Battle League - 2m (540k) • Xenoblade 3 - 1.6m (260k).”

So, as Nintendo prepares to say farewell & ‘Good day, Sir!’ to Switch as its lead hardware platform, we genuinely wonder what’s next. Souped-up Switch hardware, with the same hybrid form factor & backwards compatibility, right? Right?

Well, much like Wonka himself, Nintendo can be full of surprises. We don’t think a move into Smell-o-vision (or Wonka Vision!) is imminent - but we wouldn’t bet our Golden Ticket on it…

The game discovery news round-up..

Finishing off the week - and after that important British ceremonial celebration earlier this week, let’s have a shufty at the trending platform & discovery news, guv:

• The crew at Steam has split out and plain English-ized its ‘online conduct details’ and ‘rules & guidelines for Steam’ pages, including relevant categories like “[Don’t] Harass other users or Steam personnel… Disrupt, damage, or manipulate Steam.. Cheat.. Violate others’ personal rights.” Oh, and ‘no begging’ [for Steam keys?] gets a mention.

• We hear ‘X% of women play games’ as a stat. But it would be nice to get a better platform/combo breakdown, huh? Well, the crew at Ampere Analysis have done just that (above), also noting: “the younger the consumer, the more devices they are likely to use for gaming. Older gamers are far more likely to use one device exclusively.”

• Debuting alongside Niantic’s AR title Peridot today, Amazon is launching Amazon Anywhere, where “you can now discover and buy physical products from Amazon stores without ever having to leave your game or app.” After linking your Amazon account to Peridot, you can buy “T-shirts, hoodies, phone accessories, and throw pillows featuring artwork of magical creatures from the game.” Intriguing.

• Xbox/Microsoft things: the platform’s May 2023 OS update allows you to view Xbox gamertags of your Discord friends, and “Xbox Game Pass Quests are now easier to find on the new Rewards tab”; after feedback, Xbox Insiders are getting an updated, less crowded Alpha version of the Xbox Home screen.

• A good Steam page dev streaming-related tip here, via Michal Napora: “With Bramble, we showcased our review scores on our stream's side panels. Any new visitors that come in can see they are looking at a game that got high praise from the press.”

• Interesting to see TouchArcade interviewing Devolver’s Mark Hickey on the publisher’s premium mobile strategy: “The truth is, Apple and Netflix are making premium games a viable business again with their subscription services, and they have been pretty cool about letting these titles onto other platforms after some period of time.”

• Sony just announced the PlayStation Plus ‘Game Catalog’ line-up for May 2023, and it’s a brand new game (Humanity), twinned with slightly older first-party titles (Ratchet & Clank: Rift Apart), plus some distinguished third-party catalog (Dishonored 2, Tomb Raider: Definitive Edition, Sakuna: Of Rice and Ruin.)

• Giant obby platform Roblox continues to gain players, as its OG demographic ages up, with DAU up 22% to 66.1 million (wow!), even if it’s still losing $250 million a quarter. And it’s rolling out a lot more info on its long-term creator roadmap over the next few weeks.

• Trying not to manifest The Rock rolling his eyes GIF, but re: MSFT x ATVI: “EU antitrust regulators are set to approve Microsoft Corp's $69 billion acquisition of Activision next week, with May 15 as the likeliest date, people familiar with the matter said.” Perhaps if this’ll put more pressure on the CMA & FTC? (And hopefully the OMGWTFBBQ.)

• Microlinks: April 2023’s top-grossing mobile games include Honkai: Star Rail sneaking into the Top 20 there; Sony is setting up the India Hero incubation project for project-based investment & training; after an alleged Facebook privacy booboo, the FTC said it might stop Meta “from monetizing any of the youth data it collects across Facebook, Instagram, WhatsApp, and Oculus.” (Some VR relevance!)

And that’s all we’ve got. See you anon with more game discovery info from the intel mines, where we’ll be ethically fracking for the rest of the week.

[We’re GameDiscoverCo, an agency based around one simple issue: how do players find, buy and enjoy your PC or console game? We run the newsletter you’re reading, and provide consulting services for publishers, funds, and other smart game industry folks.]