Epic Games is changing the way Fortnite creators are paid, and it could have a transformative effect on the ecosystem of the game. Now, 40 percent of all the money Epic rakes in from Fortnite — hundreds of millions of dollars, if not billions — is up for grabs.
Feds arrest alleged BreachForums owner linked to FBI hacks
The FBI has arrested the person allegedly in charge of the BreachForums online hacking community, as reported earlier by Krebs on Security and Bleeping Computer. Conor Brian Fitzpatrick, also known online as “Pompompurin,” was arrested at his New York home on Wednesday and charged with conspiracy to commit access device fraud, according to a pair of court filings.
In a sworn statement, the FBI agent involved in the case claims Fitzpatrick admitted to owning BreachForums at the time of his arrest and identified himself as Pompompurin. Pompompurin created BreachForums after the FBI seized RaidForums, a similar hacking site that also sold leaked information.
The hacker is implicated in a number of breaches, with many of them targeting the FBI. In 2021, Pompompurin took responsibility for a hack that sent out thousands of fake cybersecurity warnings from the FBI’s email address, and is also linked to the breach of Infragard, the FBI’s information-sharing program that aims to raise awareness about physical and digital threats to government organizations and independent companies.
The hacking forum was recently involved in the breach of DC Health Link
Fitzpatrick was released on a $300,000 bond on Thursday and will appear in a Virginia court on March 24th, according to Bloomberg.
Fusion startup Type One Energy gets $29M seed round
The oversubscribed round is yet another sign of fusion’s maturity
One fusion startup is betting that a 70-year-old idea can help it leapfrog the competition, so much so that it’s planning to skip the experimental phase and hook its prototype reactor up to the grid.
The decades-old concept, known as a stellarator, is deceptively simple: design a fusion reactor around the quirks of plasma, the superheated particles that fuse and generate power, rather than force the plasma into an artificial box. Easier said than done, of course. Plasma can be fickle, and designing “box” around the fourth state of matter is fiendishly complex.
That’s probably why stellarators spent years in the fusion-equivalent of the desert while the simpler doughnut-shaped tokamak ate everyone’s lunch, and nearly all of their research funding.
But not all of it. Type One Energy is the brainchild of a handful of physicists steeped in the stellarator world. One built the HSX stellarator at the University of Wisconsin-Madison, two more performed experiments on it, and a fourth worked on the Wendelstein 7-X reactor, the world’s largest stellarator.
Together, they founded Type One in 2019 and nudged forward their approach to fusion at a steady pace. The company wasn’t in stealth — TechCrunch+ identified it as a promising fusion startup last year — but it was operating on a slim budget.
For deep due diligence, minimize disruption to maximize success
Most founders are so laser-focused on convincing investors to invest that they don’t fully consider the due diligence process that comes after. But as the funding landscape becomes tougher, it pays to know what kind of investor you’re dealing with, and how to handle due diligence right from the outset, so that it doesn’t jeopardise your chances of signing a deal.
When it comes to due diligence, investors can vary enormously in their approach. While many VCs are flexible, particularly at an early stage, there are situations where you will face a deeper process, involving specialist external consultants. I’ve found that this is most common amongst venture capital trusts, corporate VCs and government-backed VCs — where the concern of potential litigation is higher — and at late Series A or Series B stage.
Having been through several of these processes with portfolio companies, I’ve seen firsthand the risks involved, due to the time they can suck from the founding team and the business. If you’re not careful, you can come up against delays, or worse, investors pulling out at the last minute. That means your focus shouldn’t only be on passing successfully, but also minimizing the disruption to your team and your business growth.
Here I’ll outline a few tactics that can help to ensure you emerge from deep due diligence unscathed and, crucially, don’t end up back at square one.
Your focus shouldn’t only be on passing successfully, but also minimizing the disruption to your team and your business growth.
Don’t waste time until you have clear commitment
Due diligence is a business cost that can suck up a lot of time. On top of that, by entering this stage you’re giving an investor a certain amount of exclusivity, which means opportunity cost elsewhere. So, before you put any significant resource towards it, you need to have clear commitment from investors.
It isn’t uncommon for big corporates to say they’re interested, sign a term sheet with you along with several other businesses, bring in a team to get educated on your sector and business, and then pull out. Because ultimately they’re the competition.
So, in early discussions you need to get an idea of the certainty of closing, a term sheet on the table, and specifically ask what the conditions are. This will give you an idea of how serious they are, the due diligence you will face, and where you might encounter issues. You need to be assertive, to understand what their offer is and the reasons behind their decision to invest. If you’re satisfied, move ahead. Otherwise, it’s probably not a good use of your time.
Some companies prepare a detailed data room before they even start fundraising, and while it might be helpful to have some of the basics ready to go, everything should ultimately flow from what the investor wants. I’ve seen founders who have prepared an amazing data room and haven’t ended up raising money. Similarly, I’ve seen the opposite situation where a founder hasn’t prepared anything and they have raised. So based on that, my advice would be to wait until you know exactly what they want. You also have confidentiality to consider, so don’t share anything sensitive before you know that an investor is serious.
Manage the scope and timeline
I would also recommend asking for the scope of work at the outset, not only to know what you’re in for, but also to help streamline the requirements as much as possible. For example, if you have audited accounts available, this should cover off a lot of the financial questions. If they’re doing technical diligence, you may want to limit the amount of code you give access to for security purposes. Or if they want to do an HR review, try to control the involvement of the team as that will be a big diversion of time.
Fortnite’s generous new creator economy has an Epic catch
Last week, Epic introduced what it calls “Creator Economy 2.0.” Under the new system, Epic will pay out 40 percent of Fortnite’s net revenues each month to creators based on how much players engage with islands other than Epic’s own. That means 40 percent of the money Epic makes from things like V-Bucks, its Fortnite Crew subscription, and in-game outfits (like for crossovers like YouTube superstar MrBeast and Resident Evil characters) — all of that goes into the Creative Mode pool.
Fortnite currently generates “billions of dollars a year in revenue from player purchases,” Saxs Persson, Epic’s EVP of the Fortnite ecosystem, said onstage at last week’s State of Unreal event. So even if we assume that translates to just $1 billion in net revenues per year, at least $400 million per year is up for grabs. But there’s one huge catch: Epic’s own in-game islands, including its flagship Battle Royale mode, are also eligible for payouts from the revenue pool. Epic is putting stacks of money on the table, then taking a bunch of them right back.
How big a piece of the pie do creators actually get? At State of Unreal, Persson said that Creative mode accounts for “roughly 40 percent of playtime in Fortnite,” suggesting that Epic not only keeps 60 percent of Fortnite’s revenue, but also 60 percent of the pool as well. But creators might get even less than 40 percent of the 40 percent pool, since payouts will be based on engagement. Instead of straight playtime, Epic will be determining payouts based on whether an island brings in new players (or lapsed ones) and if players come back on a regular basis.
Those metrics, in my opinion, still largely favor Epic’s own islands. The thing that keeps me coming back to Fortnite nearly every day are Epic’s excellent battle passes, which offer things like new outfits as well as V-bucks to spend in the game’s store if you get enough experience through completing quests. The vast majority of those quests can only be done on Epic’s islands, giving me little reason to branch out to something made by a non-Epic creator. It is possible to earn experience in Creative mode, but those islands typically don’t give as much experience as what you get from a few of Epic’s handmade quests.
Epic will also be using its payouts as “the primary way for Epic to pay for our own game development in Fortnite going forward,” Persson said at the State of Unreal keynote. That’s apparently just for making things like the Battle Royale islands; the other money that’s off-limits to creators is used to fund the development of what Epic calls “Fortnite ecosystem development,” including things like the game’s code, art, item shop content, marketing, and customer support, according to an FAQ. (You may need to be logged into an Epic account to follow this link.)
How Epic decides those payouts could also be contentious, especially because Epic’s description of the metrics are ultimately pretty vague. (The company also reserves the right to ban islands it deems inappropriate, including Mario Kart clones and recreations of some older Fortnite islands.) The company will be open to criticism about how it makes payouts, Persson tells me in an interview – “our job is to listen to that,” he says – but it’s intentionally not disclosing exactly how it measures the metrics because it doesn’t want to inadvertently introduce the wrong types of incentives.
I also asked about how Epic might expand the battle passes to better incorporate non-Epic experiences and so promote creators other than itself. (The company occasionally does this already, but in this new system where Epic is paying creators based on player engagement, keeping the battle pass Epic-focused could be an unfair advantage.) Persson tells me he expects the battle passes will change to better incorporate work from outside creators, and while Persson didn’t commit to when that might happen, he says that “I think it’s an important question to get a better balance than what the battle pass is doing today.”
Even without knowing how much money is actually up for grabs, creators I spoke with believe the new system will be much better. “[T]hey’ve taken a step in the right direction of compensating creators for our hard work on the platform,” Kasper Weber, CEO of Beyond Creative, which makes custom Fortnite experiences for brands, tells me in an email.
Under the previous “Support-A-Creator” system, creators never got a dime when you played on their islands or purchased their products from Fortnite’s store. If you wanted to make sure a creator you liked got some cash, you had to know their individual “creator code,” know exactly where to input that code before you bought anything from the store, then actually follow through. Even then, that creator would only get 5 percent of your purchase. That’s why many Fortnite creative studios have had to rely heavily on brand deals for income instead, effectively building virtual worlds just to advertise brands like Verizon, Chipotle, or Balenciaga.
“The Support-A-Creator system was based around content creators and those audiences, and it wasn’t really built for Creative developers,” says R-leeo Maoate, co-owner, CEO, and creative director of Zen Creative. “I think [Creator Economy 2.0] is going to be a much better way for creators like us to monetize, make a living, and incentivize us to make better experiences.”
Other Fortnite creators I spoke to similarly suggested this might lead to better islands for players. “To now have a system that you can directly influence by making a really great game, or if you have a game that players are spending hours [in] or coming back to every day — to be rewarded for that by Epic and see that return monetarily is a big deal for us,” says Boomer Gurney, creative director for game development for Team PWR. (Though, like with the Support-A-Creator system, creators will still need to have earned at least $100 in payouts within a year before they can actually cash anything out.)
These outside groups will now be competing with Epic for the revenue pool, but “in some ways, we’ve always been competing with Epic’s islands,” Gurney says in an email. “As a team that has always prioritized player engagement and the longevity of experiences, we’re excited to now have a revenue system that directly supports these analytics.” They’re also now on a more even playing field when it comes to development; previously, creators could only build islands using Epic’s in-game Fortnite tools, but they now have access to the new Unreal Editor for Fortnite that adds a lot more features and lets creators pull in customized graphics assets.
Epic seems to hope the move will lead to new types of experiences that aren’t primarily about tense shootouts and complex building. “We want to grow by welcoming creators, bringing in new genres of games and new ways to engage that go beyond the battle royale experience,” Epic CEO Tim Sweeney tells my colleague Andrew Webster. That could lead to a wider audience for Fortnite than it has today. The incentives mean we might get something like Roblox’s mega-popular Adopt Me! life simulator — and if it brings in new players that stick around, those creators will get paid.
Now that they’ll make money keeping players interested rather than building advertisements for brands, teams like Team PWR and Zen Creative can put more energy toward games that might be more directly focused on fun. The creators I spoke to learned about the new system on Wednesday — the same time everyone else did — and so far, they’re hopeful.
“We really came from not a lot, where you couldn’t really make a living these last few months unless you might have been in the top one percent of creators,” Weber tells me. “I’m mostly just happy to see that it’s moving somewhere.”
- Fusion startup Type One Energy gets $29M seed round
- For deep due diligence, minimize disruption to maximize success
- 2023 Acko Drive Awards All Set to Honour the Best From the Automotive World
- Fortnite’s generous new creator economy has an Epic catch
- David Maltas: Teams Up with Tech Giant to Revolutionize Virtual Reality
Entertainment2 months ago
Rita Ora On Tessa Thompson Taika Waititi Throuple Rumor
Social Media2 months ago
Meet the actor Shanu Bhutto
Social Media2 months ago
How to start Career in Graphics Design with Canva?
Social Media3 months ago
Meet Devam Divecha is a Young Successful Musical artist, Rapper and Famous Singer in India
Social Media2 months ago
Meet the digital influencer and marketer; Alex Chungath
Social Media2 months ago
Young Entrepreneur Pratik Virkhare bringing latest trends in Digital Marketing
Cryptocurrency3 months ago
An ace professional taking over the world of Forex and Trading
Entrepreneurship2 months ago
3 Ways to Create a Hybrid Work Environment That Works for All Generations