Social Network 2.0 — Why Facebook May Acquire Epic Games (Fortnite)

Last week I recorded a podcast episode about gaming. Oksana Ivanova, my regular podcast guest, and I discussed how video games have changed over time and where the industry was heading. As we discussed Fortnite and its mind-boggling success, we stumbled upon a few interesting thoughts.

During our conversation I recalled that a couple of weeks ago Fortnite live streamed a music concert of a real world artist Marshmello inside its game. It was the first time ever this has been done. While to some this may seem as a simple innovation, I believe there’s something much bigger behind this.

First, let’s quickly level set on the taxonomy. We call video games, well, games but in reality, they are environments. People who play these games immerse themselves into these environments and experience them. Fortnite didn’t live stream the Marshmello’s concert into its game — it streamed it into its environment.

As Oksana and I continued to talk about the subject, I also remembered about an old video game called Second Life. It was first introduced in 2003 and still exists today. The game fully reflects its name — your build yourself your second life and exist inside that environment. You can build or buy your own house, you can do stuff with other people, you can build businesses, etc. Some countries even opened their virtual embassies inside Second Life (i.e. Sweden, Estonia). Not too many people heard about this game though. I personally never played but I just happen to know about it. The current state of this platform doesn’t seem to be too exciting. According to its Wikipedia page, it sounds like the platform never crossed a 1 million user mark (Fortnite got to 200M players in less than a year). Some YouTube videos about Second Life describe it as somewhat buggy and even confusing. Bottom line — it never really took off and it doesn’t look really like it ever will.

The reason I’m bringing up Second Life is because it clearly represents an example of virtual environments that users immerse themselves into. The only problem with this particular product is that it was way too early. Back in 2003 we didn’t have many immersive video games like we do today — the most popular being the Fortnite at this point. Introducing Second Life in 2003 did not spark much interest because most people didn’t really know what to do with it. Now, 15 years later, we have been exposed to all types of games and virtual reality experiences that living a second life in the digital world (even if it’s part-time) doesn’t seem like a crazy idea. That’s exactly where I believe Fortnite is going and the concert streaming was step number one in this very direction.

Fortnite enjoys unprecedented success as a video game product and that’s what will help them take it to the next level — become that second life virtual immersive experience social platform. I’m more than sure that streaming the Marshmello’s concert was not a one-time experiment for them. They will now start integrating more and more real-life concepts and experiences into its environment attracting more users and making them spend more and more time in it. What will this lead to? It will lead to Fortnite becoming a social network 2.0 where people will interact with each other the way they do on social media now but with a much richer experience. The inflow of money into this product will be unprecedented so users will have everything they need to stay engaged.

What does this mean for Facebook that’s already experiencing a substantial outflow if its users? It will lose even more people because a lot of them will start moving to Fortnite. Facebook is basically a two-dimensional social network environment where all you can really do is post text, photos and videos while consuming and commenting on those same things posted by others. That’s it. All this will be done inside Fortnite and I have a feeling these guys are already building all this social 2.0 functionality.

Now, assuming this has a good chance of being true, I’d think Facebook is already thinking of what to do about it. It’s a major threat to them already as people spend more of their time in Fortnite vs on Facebook. It’s really simple — it all comes down to attention and eye balls. If Fortnite offers social media users a better experience inside its environment, they will come, and Facebook will lose big. As it happened with Instagram and WhatsApp, Facebook seemed to be relatively proactive in terms of eliminating these threats by acquiring them. One can argue that their Oculus acquisition was not very successful but at the same time, the whole VR thing still seems to be very early for mass adoption, just like Second Life did back in the day.

In the Fortnite’s case, where the world is now definitely ready for it, I do believe that Facebook may go after it and simply make an offer to Epic Games that they won’t be able to refuse.

Whether it will happen or not, I don’t know. I did google all kinds of combinations of search phrases like “Facebook will acquire Epic Games/Fortnite” and not a single matching result came up so may be I’m the only crazy guy who came up with this assumption. Either way, the future will tell but I do believe there’s something there. The world was not ready for Second Life type of experiences 15 years ago but now it seems to be. Facebook has nothing in its portfolio to offer to their multi-billion audience so there’s a chance they may do something about it.

PS And hey, it’s also possible that Amazon may be thinking about buying Epic Games too. They already own Twitch so they might as well go upstream as they like to do it. Who knows.

I’d love your comments guys! Recording that gaming episode and writing this article was very fascinating to me. Thanks for reading!

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Published on 2/18/2019

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