The Fortnite World Cup has kicked off in New York City, and a $30 million prize pool is on the line

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Fortnite's $30 million world cup has kicked off

Many a tennis great has been crowned under the bright lights of New York's Arthur Ashe Stadium. But this weekend, the renowned arena will oversee the coronation of a different kind of royalty as the world's best Fortnite players duke it out for their lion's share of a $30 million prize pool.

The Fortnite World Cup, which kicked off on Friday, features 100 solo players and 50 duos who qualified for the event by competing in 10 weekly tournaments from April to June. While the $30 million will not be the biggest prize pool ever awarded at a single esports event – that record will belong to next month's The International, an annual Defense of the Ancients 2 (DotA 2) flagship tournament – it is part of a whopping $100 million in competitive winnings that publisher Epic Games pledged to give out this year, matching its competitive prize pool from 2018.

The 10 weekly tournaments also boasted a $1 million prize pool each. Of that $30 million on the line at the World Cup, $3 million apiece will be awarded to the winners of both solo and duo competitions. Even solo competitors who finish outside of the top 20 will walk away with $50,000 in winnings.

This is the first World Cup since Fortnite's battle royale mode burst on the scene in 2017. As of this past March, the game had grown to about 250 million players after making an estimated $2.4 billion in revenue last year to become the top grossing free-to-play game in 2018, according to SuperData.

Now, almost two years from its launch date, Fortnite battle royale has exploded into a cultural phenomenon whose reach has burst through the confines of the mobile devices, PCs and TV screens upon which it's played.

In many ways, since its inception the game has taken the status of video games as a social medium – not just entertainment – to new levels. Loup Ventures managing partner Doug Clinton calls it the "third iteration of gaming loyalty" that focuses on the "network effect" of games.

That means gone are the days when gamers were primarily loyal to and focused on titles in the traditional sense. Instead, Fortnite's rise is reminiscent to the early days of some of social media's biggest platforms, says Clinton.

"People started to see mainstream celebrities that they knew [playing the game]," he explained, referring specifically to moments like when mega streamer Ninja played with music star Drake. "They not only created a game with a perfect social dynamic, but presented it in a way where celebrities could go and play with their fans."

That, according to Clinton, is similar to when Twitter and Instagram users were increasingly seeing their favorite celebrities post on the same platforms, which "pulled people into the network more strongly." Electronic Arts' Apex Legends, he notes, also had a chance to capitalize on the same network dynamics, but "they didn't innovate fast enough" to take advantage of that small window of opportunity before stream viewership numbers plunged and growth concerns emerged.

General view of the main stage during the Fortnite World Cup Finals e-sports event at Arthur Ashe Stadium, Flushing, New York, July 26, 2019.
Catalina Fragoso | USA TODAY Sports | Reuters

And that same network dynamic has driven investor interest in the game and publisher Epic Games. Last October, Epic raised $1.25 billion from a group that included some of the traditional sports world's biggest names.

Among those investors is aXiomatic Gaming, an esports investment group whose board members include Golden State Warriors owner Peter Guber, Washington Wizards and Capitals owner Ted Leonsis, Tampa Bay Lightning owner Jeff Vinik and basketball legend Michael Jordan.

Bruce Stein, CEO of aXiomatic and a former executive at Mattel and Sony, emphasizes that Epic's ability to provide a "new experience for gamers that isn't offered in any other game" has expanded the target demographic for the industry thanks to the interactivity of Fortnite.

"It's a remarkable change in what a game can be experientially," Stein told CNBC. "When you're seeing a gaming universe where kids can socialize, interact, create their own game islands and it's a medium that they can take in a direction they view as fun, that's a remarkable achievement for a game."

"If you invest in a publisher, there's always an amount of title risk because some games do well for a long time and some games have a far shorter half-life," he added. "When you have this many components of online interactivity concentrated in a gaming environment, you have redefined what the gaming experience is."

A big part of these experiences involves giving audiences the ability to share moments that extend beyond the gaming sphere. Back in February, DJ Marshmello played a concert in Fortnite itself that was virtually attended by over 10.7 million people, according to Epic Games.

And that's only the number of people who saw the concert in-game, excluding live streams hosted on Twitch and YouTube.

So this weekend's World Cup is not only a culmination and celebration of Fortnite's reach as a game, but it also confirms its status as the driver of an online social landscape that redefines what it means to consume and engage with content.

"This kind of experience, a world cup for Epic, represents what that they have done in creating a social meta that has so many attractive points," said Stein. "We're looking to discover where people want to go with it to better aim our future investment dollars."

The Fortnite World Cup is one of the biggest events of the year for the esports industry, which research firm Newzoo projects will top more than $1 billion in revenue this year.