Why you might see a movie based on “Fortnite” in the not-so-distant future
Epic Games is the developer of the popular video game Fortnite, but at the moment you cannot play it on millions of mobile devices because Apple banned it from its App Store. The two sides are still engaged in a legal battle. But for now, Fortnitethe ban is valid.
This leaves Epic Games looking for new ways to monetize their intellectual property. And in this video from Motley Fool Pass behind the scenes, recorded on October 11, Fool analyst Sanmeet Deo explains to contributor Jon Quast why Epic Games is looking for scripted video content.
Jon Quest: Sanmeet, I know we hadn’t planned on doing this yet, but this might be the natural place to talk about it. From what we’re talking about, that was a loss for Epic, and they’re still banned from the App Store, and they’re still banned from the [Alphabet] Google Play Store. Now they are trying to figure out how to increase our income in this new reality of being banned? You’ve brought a great item to the table that they’re exploring for entertainment.
Deo Sanmeet: Yes, it’s true. I was just trying to remember which article. No, absolutely.
Quarter: Business intern, I think.
Deo: Let me share this here if you can see it. Epic Games can do Fortnite film as part of the expansion of entertainment. They are planning to launch an entertainment division as Jon said for scripted video programming. They’ve already talked a bit about a Fortnite film to enter the entertainment business and also develop. But what’s interesting here is that they also hired people, Lucasfilm executives who worked on Star wars, who are in Disney and a few others. But I am not getting a full subscription to this article here.
But it’s very interesting, and it’s still that larger theme that we’ve all talked about a number of times on our show, which we’ll probably talk about endlessly. [laughs] in the future is it this convergence of movies and games and how it works back and forth whether it’s a movie or a tv show starting. Then like last week, we talked a bit about Squid game and how Squid game has become a bit of a game on Roblox and how this trend is. And I even saw merchandise sold on Etsy. I think it was, I saw a post from Squid game paraphernalia on Etsy. It was interesting.
But now here Fortnite become an entertainment division of Epic Games to launch a movie. I can see TV shows and so on. Yeah, what do you guys think? Do you think this is a good strategy? How do you think it’s going to play out with this battle they’re going to have with Apple?
Quarter: As you point out, it goes both ways. It really is, think about it, an entertainment industry. We spoke in the last episodes of Netflix, and they have this vast library of intellectual property that they’ve turned into TV shows and movies that they now want to start a games division to monetize that content in a new way with video games.
We also see it going the other way. What we’re talking about right now and we can’t invest in Epic Games, but that’s an illustration of the process of, here’s a company that owns this video game intellectual property. Now they want to monetize it, and I think that was even said for scripted TV as well as maybe a movie.
These are cross-platform opportunities to monetize a single piece of IP, which on the one hand is good. However, this does not guarantee the success of the company or the success of the shareholders. It doesn’t necessarily mean that. You still need to offer good video game content if you are a company like Netflix that has these existing movie products and vice versa. If you’re a video game business, you’ve got that great video game, you’ve got to make something great on the big screen.
We’ve seen that play out, I think, to a small extent before with the company. I think it is Mattel, if I’m not mistaken, [in fact, the speaker was mistaken. The company he intended to reference was Hasbro.] who owns the Transformers the franchise and the Battleship franchise. They did some Transformer movies based on toys. A few films have been good box office successes. A few of those in the franchise weren’t. We also saw Battleship based on the game, a complete bombshell, and it probably made them lose money in the long run. It doesn’t necessarily guarantee success, but it’s a good strategy if you master it.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.