The Fortnite Founder: Tim Sweeney and Epic Games

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S1: You remember when you first played it?

S2: It was sometime in second grade. Late it. I think I had a kind burn in front of me.

S3: Dominic Skalkaho is eight years old. He’s a huge fan of a game called Fortnight.

S2: Yeah, I heard that is like really popular and everyone is just playing it.

S3: My friend, you’re playing it for night, launched in 2017. Since then, it’s become one of the most successful video games ever created. 250 million players. Billions of dollars in revenue. Last year, Netflix had its biggest competitor for eyeballs. Isn’t a TV rival like HBO, it’s fortnight. As is often the way with things kids love, parents have some concerns about fortnight. Mostly the kids love it too much. Portland is so addictive and consuming that Dominick’s parents strictly limit his access. You get to play once a month. How often do you wish you could play?

S2: Basically every single day, unless I wanted to do something else. But you rarely want to do so. Yeah.

S1: So where did this phenomenon come from behind this wildly popular video game? Is a 30 year old company based in North Carolina that has repeatedly shaken up the world of gaming. And along the way, meet its eccentric founder, a multibillionaire. Do you know what company makes fortnight at the games?

S3: I’m Seth Stevenson. Welcome to Thrilling Tales of Modern Capitalism. Today on the show, The Fortnight founder Tim Sweeney and Epic Games.

S1: Where did epic games begin?

S4: So was founded in 1991 by a chap called Tim Sweeney.

S1: Simon Parkin is a contributing writer for The New Yorker. He covers the videogame industry.

S4: He was sort of a programming genius who had started making games when he was just 11 years old.

S3: When he was still in elementary school, Tim Sweeney received an Apple two computer as a gift from his older brother. Sweeney almost immediately started programming very simple games and that computer. And then he began to test those games out by letting other kids play them while he watched.

S4: He was quite savvy for a teenager because he knew that if he wanted his games to be successful, he needed to make sure that players have different abilities, could get into them and understand what they were doing. So he would invite all the kids from the local neighborhood over to come and play his games that he was designing. And he would watch them while they were playing and make adjustments and take notes based on if they got confused or if they got stuck in a certain bit. And then he’d go away and adjust the game accordingly.

S3: It was in these early years that Tim Sweeney started to figure out the very things that would later make him so successful. First, let people try your stuff for free and good things will happen. And second, listen to those people’s feedback about the product you make and act on it.

S1: When Sweeney eventually incorporated his company, he applied those insights over and over again at bigger and bigger scale. Sweeney launched his company in earnest in 1991 when his games got good enough that people would pay money for them. The first name he chose for his company was Potomac Computer Systems. After his hometown in Maryland, he later changed it to epic mega games and then just epic games. The first game Sweeney sold was called VCT and he chose that name because it would come dead last alphabetically and lists of games for sale. Everyone else was naming their games with A’s, so he thought he might stand out.

S3: ZT had graphics, but they were really basic, just shapes made out of letter and no characters that you can move around with the cursor keys, collecting treasure and shooting at enemies to sell the game.

S1: Sweeney used a business model that was popular in the world of software at the time. The model was called shareware. It’s what we now call freemium. You’d give out the early levels of DDT for free. To kind of get you hooked. And then if you wanted to keep playing the later levels, you had to pay for them. Sweeneys started selling about four or five copies of DDT a day, shipping out floppy disks by mail from his parents house in Potomac. The most famous video games released in 1991 were for consoles like the Super Nintendo or the Sega Genesis. But DDT was an M.S. DOS game to play on your personal computer aimed at a slightly nerdy or audience. People loved playing the game, but for a lot of customers, the best part of it was that it had a sort of editing program built into it that you could use to design your own video games. It was a tool that made creating games like ZT easier for people who weren’t as gifted at programming as Tim Sweeney. Sweeney was a college undergrad when he made ZT. He already had years of video game coding under his belt. So when he needed to pick a major at the University of Maryland, he decided to shore up other parts of his skillset.

S4: He decided to study mechanical engineering, which turns out to be a fortuitous decision, because during that course, he learns all sorts of complicated maths to do with 3D and vectors and stuff that he wouldn’t have learned in a computer science course.

S1: Math in mechanical engineering are subjects that weren’t super relevant when Sweeney was making text-based computer games with rudimentary graphics. But as computers got more and more powerful and video games got more and more complex and visual, Sweeneys Education left him perfectly situated to take advantage.

S4: And then, you know, in the late 90s, when computers become able to render 3D in real time in such a way that videogames require them to be. He then has all of this mathematical knowledge from his university degree in order to be one of the first people to put together a fast paced 3D shooting game. And that’s that’s unreal.

S3: Epic’s first major hit game that they put out, Swinney’s first blockbuster game titled Unreal, had stunning visuals.

S4: His rivals took note fairly early into the process after Unreal comes out. Tim and the team at Epic start to receive inquiries from videogame developers saying, hey, the software they use to put Unreal together. Is there any chance you could sell that to us so that we can use it to make our 3D games? And they’ve had this light bulb moment of, well, why don’t we license the software and we can have a new revenue stream this way? So pretty soon they launch the unreal engine and the idea is that they sell licenses to people who want to make a game.

S1: When it came to the long term fortunes of Sweeney and his company, the important thing wasn’t so much the game, unreal as it was the extremely powerful software that was created in order to bring unreal to life. This software was an engine for making beautiful 3D video games. It was called The Unreal Engine. It’s kind of the same thing that happened with Sweeney’s first shareware games, VCT, where people loved the tool that made the game because it was so easy to use the tool to make other great games. Unreal Engine made it quicker and easier for other computer programmers, even the ones who didn’t major in mechanical engineering, to program an attractive, complicated video game like on real.

S3: Of course, Epic kept using the unreal engine to create its own.

S5: They had a gigantic hit with a game called Years of War.

S3: That game wasn’t just a big success, it also served as great marketing for the Unreal Engine and the magic it could do.

S1: At first, Epic charged other people a licensing fee to use the unreal engine for their own projects. But in 2015, with the release of a new version, Epic hit on a better way to make money off it.

S6: I’m Tim Sweeney, the founder of Epic Games, creators of The Unreal Engine.

S3: As of today, we’re making a new engine for freely available for everybody to download and use this strategy of giving the software away for free, like with shareware back in the day. What? Unreal. Engine spread far and fast. It became the industry standard. It was easy to hire programmers who knew how to use it. And the royalty policy let the big successful games made with unreal engine subsidize all the projects that didn’t make money.

S6: It’s a business model open to everybody, and one in which we succeed only when you succeed.

S1: It’s come to unrelenting download the software and start creating profits from the unreal engine powered Epic Games balance sheet for a couple of years. But by 2017, Epic was on the verge of its next and its biggest success.

S4: I met with Tim Sweeney probably in the spring of 2017, which is a few months before the first iteration of fortnight comes along, and I have to say that when I’m talking to him, he mentioned fortnight and hardly anyone had heard about fortnight at this time when fortnight does first come out. It doesn’t make a splash at all. There’s not much interest in it.

S3: As Simon Park in remember did, the initial version a fortnight was not a smash hit. It was a game where you basically roam around on an island and shoot stuff. But then Epic tweaked it. They came up with a mode of play where instead of you against the computer, it’s you against 99 other real human beings out there on the Internet. All of you engaging in a brutal fight to the death. This new mode of play was called Battle Royale.

S4: Hundreds of players dropped onto an islands with nothing but a pickax. They have to scavenge from materials and pick up weapons and then fight each other until the last one standing.

S2: Or, as Dominic describes it, you’re in a giant blue bus powered by a hot air balloon and jump out of it and sky dive to a location on a map. But no one is your friend, Siri. Like you kill anyone.

S1: You see, fortnight wasn’t the first video game with a battle royale mode, but it perfected it with fluid and intuitive gameplay. Powered by the Unreal Engine, the graphics were fun and lively, not dark and scary, like most fighting games. Forte was violent, but the violence was just cartoony enough that parents could stomach their kids playing the game. How bloody is it compared to other games you might play?

S2: It’s not bloody at all. In fact, when you kill someone, some random flying robot comes along and does a little weird hologram scanning thing and the guy disappears with the person’s items are lay down the floor for you to pick them up.

S1: Once the battle real mode was introduced, fortnight took off at an absurd pace, it was helped by network effects. The more of your friends who were on it that you could play with or against, the more you wanted to be on it, too.

S4: Almost immediately, this play mode becomes very popular. And in fact, between September the 15th, 2017, when it comes out and the end of December, it’s a. Something like 40 million players. So it just gives you a sense of the scale of the success that suddenly comes along epic games as a privately held company.

S1: So hard numbers can be difficult to come by. But estimates suggest that as of the end of last year, fortnight had amassed 250 million players worldwide and was collecting as much as 370 million dollars a month with epic clearing a profit of around three billion dollars a year. The company as a whole has been valued at 15 billion dollars, and its investors include Disney and the Chinese mega conglomerate Tencent. Tim Sweeney himself is worth something north of seven billion dollars, which is quite something given that he wants this company from his parents basement.

S3: Here he is at a recent conference talking about his low expectations when he began.

S7: Hey, thank you all for coming. When I started the epic games in 1991, I had this sinking feeling that was too late. The leading developers and publishers had already been established and they wouldn’t really have a chance. And so it’s been awesome to watch. Over the past 30 years, this industry evolved from essentially a garage business to nearly a hundred billion dollar a year global industry. That’s a powerhouse around this time.

S1: We’ve seen a lot of Sweeney eventually moved epic games from his parents house to a corporate campus in North Carolina near Raleigh. He’s bought himself a few fancy sports cars along the way, but he seems to spend most of his money buying up land in North Carolina to conserve it. He apparently loves to hike in the woods. He made a fortune from creating imaginary digital worlds, and he’s used that fortune to preserve parts of the real world. You met him. Can you tell me about the circumstances when you met him and what kind of person he struck you?

S4: As I met him in Sweden at the Nordic videogame conference where he was giving the keynote speech. Probably one of the last interviews he did, I think I think as soon as fortnight came out. He probably felt he didn’t need to give any interviews. He is like a typical sort of nerdish guy of his age. He’s 50 now. He so wears rimless spectacles and black hoodies and very much looks like a computer programmer, but obviously very, very smart. You know, not only a talented mathematician, an engineer and programmer, but also has a fair amount of business acumen.

S1: So Tim Sweeney basically sounds like every other tech founder and intelligent guy who, like Bill Gates and Mark Zuckerberg, never bothered to finish college. A nerdy fellow gifted at programming clever business. So what in particular explains the absolutely phenomenal success of his videogame fortnight? There’s that idea of iteration of constantly tweaking your products and trying out new ideas.

S4: For example, fortnight for a little while had five planes. So players could team and get on an airplane and fly around. They’ll try it out for a few weeks. They’ll see how it affects the balance of the game and then they’ll take it out again if it’s not working. And there are hundreds of examples of things that they’ve put into fortnight, tried for BET and taken out. So the game is being constantly refined at a very regular, well-organised intervals. And I think that’s certainly part of the reason for the success. Because for players, there’s a sense says, you know, if you’re heavily invested in a game like this and that’s what you’re playing every day, you want evidence from the game maker that they are really on it, that they’re responding to feedback from the community, that they’re making the changes, that they’re improving things.

S1: And then there’s the idea of offering the goods gratis. The freemium model, just like his early hit ZT fortnight, is free to play. You give people a taste, but once they start playing and they love the game, Epic will start selling them things. You can buy special costumes for your character to wear inside the game, or you can buy the ability for your character to do special dances. To be clear, these don’t have anything to do with winning the game. They don’t make your character any stronger. But people will still pay real money for this imaginary stuff. They’ll also pay for real stuff fortnight merchandise.

S2: One of my friends has a fortnight back, back and a fortnight lunchbox. Do you have fortnight gear? No. Only the action action figures. Which action figures? They have Ragnarok drift.

S1: Jonesy. Chapter one. I have no idea what Dominic’s talking about, last lord. Great bomber called team leader, but I do know that the money he or his parents spent on these action figures is. I think it’s the I know goes to epic games as revenue. One of Dominick’s favorite things about Fortnights Battle Royale mode is just that he can hang out with his friends over the Internet. In this meticulously crafted world where they can shoot stuff, Simon Parkin says that’s what really made the game take off.

S4: You know, I’ve got a 12 year old son and, you know, sometimes they’ll play Battle Royale and they’ll be playing to win. But a lot of the time, they’ll just be mucking around in one of their game modes where you can just sort of make your own rules and do whatever you want to do and just be chatting and and actually play with them, too. And it’s, I suppose, the equivalent to perhaps in the 50s when a father would go out hunting with his son or something like, well, just hang out and chartered plane. It’s a good way to bond.

S1: In terms of sheer cultural ubiquity for night might have peaked a year or two ago, people aren’t playing fortnight quite as much this year as they were playing last year and the year before is it’s still cool. Do you think do you think kids still like it?

S2: Yeah, kids definitely still like it, but it’s not as huge and B, popular as it was a year.

S3: But the game is still a powerhouse. And during the quarantine that’s happened due to the coronavirus fortnight has once again become a favored place for people to hang out together. Virtually fortnight, even recently added a party royale mode where there’s no shooting of guns, just shooting the breeze and various nonviolent contexts, which aligns with some of Tim Sweeney’s grander ambitions. Even before the pandemic that shut down real world gatherings, Sweeney spoke a lot about virtual reality and how he believes that in the near future we’ll be spending a ton of our time in the virtual realm, conducting business, making friends and doing everything else we do in real life. But doing it in a constantly updating, beautifully rendered 3D world, the kind of world the unreal engine is designed to create. The onset of social distancing is only accelerating our shift to virtual spaces like fortnight, but on the subject of fortnight. Let’s give Dominic the last word, because Dominic wants to make clear that although he loves to play fortnight and he owns many fortnight action figures and he dressed as a fortnight character for Halloween, he is definitely not like, oh my gosh, for a night, for a night or at night.

S2: Let’s always have fortnight, fortnight for it. Or fortnight, fortnight, fortnight.

S3: That’s our show for this week. This episode was produced by Jess Miller and Aisha Solutia, Technical Direction from Kevin Bendis. Special thanks to Slate’s politics editor Tom Skoko for allowing us to make his son podcast famous. Gabriel Roth is Slate’s editorial director for audio. Alicia Montgomery is the executive producer of podcasts at Slate. June Thomas is senior managing producer of the Slate podcast network. We’re still a new show. So if you like what you hear, please leave us a review in items. It really helps other listeners find us. And you can also help us make new episodes by signing up for Slate. Plus, it’s only 35 dollars for the first year and you’ll get this and other Slate podcasts ad free. Sign up now at Slate dot com slash. Thrilling. Plus, I’m Seth Stevenson. We’ll be back with more thrilling tales next week.