Last weekend 10 million people came together to watch popular DJ Marshmellow perform a live set of EDM music inside the popular Fortnite game
. Fortnite is a Battle Royale style multiplayer game where 50 people per room play against each other in a “last man standing” format. Since the game’s launch almost 18 months ago it has grown to acquire nearly 200 million unique players and earned over $4B in revenue just last year. Yes, it’s a highly successful and profitable game. But with this Marshmellow concert driving in 10 million users to listen, hang out and socialize, Fortnite jumped the shark proving itself as so much more than “just” a game. It’s a social network, it’s a concert venue, it’s chatroom, it’s a virtual world. And yet, it’s so much more than all of that. Marshmellow’s concert marked the coming to fruition of the impact and opportunity that lies within the true digital native generation.
I spotlight this virtual dance party because it illustrates a number of key shifts happening right now that will change the way we interact with each other and how we work, these shifts are: the rise of Generation Z, the evolution of digital community, the mainstream adoption of digital self-personification, and the ascribing of tremendous value (i.e. dollars) to digital goods.
The Rise of Generation Z
“Gen Z” is the colloquial term given to post-Millennials born in the mid 90s - 00s and grew up in the first decade of the 2000s. They are native technology and social networking users. They have always learned by tapping on screens and chatting with Alexa, and they build deep emotional bonds through the lenses of their iPhone cameras and the pixels on their screens. To them, the digital world isn’t actually so different than the physical world; it’s an enabler, a layer on top that creates higher speed of communication, and a greater magnitude of community. Gen Zers are filtering into the workforce, becoming a powerhouse of purchasing power, and their fickle attention spans make gaining their focus an incredibly value asset. To build successful product and businesses over the next 10 years it will be incredibly important to understand the mindset and drivers of Gen Z. (I’m currently reading this really great book
about about the impact and motivation behind the people in Generation Z).
The Evolution of Digital Community
And while many of us may think that the youth of today is just *too* obsessed with their phones, buried in endless text threads, Snaps, and watching other people play video games on YouTube. What we should understand is that this is the evolution of the definition of community itself. We live in a world where we are perpetually connected to every other person on the planet, and we are no longer limited to building community based on geographic proximity. The definition of community has changed. What began as IRC chat rooms in the 90s, and became blogs and social networks in the 00s, has become games like Minecraft, Roblox and Fortnite in the 10s and 20s. These are all are places for the next generation to convene and spend time with each other. While mainstream VR headsets are still to breakthrough, virtual worlds are already here and they are likely to pervade the ways that we interact with family, friends and co-workers for years to come.
Mainstream Adoption of Self-Personification
One of the most interesting aspects of Fortnite is the user’s ability to purchase “skins” or custom items such as digital clothing, tools, kites, even digital dances that can be applied to your character. The purchase of skins themselves is not a unique feature, what is striking is that these digital items do not increase the skill level or power of the player, rather they are digital personifications of self that lets the user express themselves and who they are in the digital world. Custom clothing, trademark dance moves and individual flair is how friends recognize them, and what makes the digital representation of a real person unique in a world made up of pixels. With the popularity of Lil Miquela
, the world’s first digital influencer, we are seeing that even digitally personified characters can drive impact, purchases, opinion, even emotion.
The Value and Economy of Digital Goods
Did you know that the digital “skins” (digital video game items) market is an estimated $50B annual market of items bought, sold and traded. Last Fall, Pokemon Go announced they just passed $2B in earned revenue since launch only 14 months prior. Fortnite earned $3B in profit in 2018. In a world where hundreds of millions of people, primarily Generation Z, are buying, selling and trading digital items, we can only imagine future opportunities for consumers to ascribe value to entirely digital items.
Marshmellow’s concert was a bellwether event, we are in a brave new world. A world where “the internet” is so much more than an information highway, it’s becoming a literal fabric of social engagement and an opportunity for value creation which will be bigger than what we know. And this is an incredible opportunity for company builders to create the future of products and services that will serve the rising digital-first Generation Z audience for decades to come.