Nineteen Eighty-Fortnite — #FreeFortnite video. Having finished the analysis in July 2020, seeing this ad in August was a pleasant surprise, since I believe it reinforces the company’s “disruptive innovator” message.

Epic Games under the Disruptive Strategy Lenses: Part 4 (Appendix)

Disclaimer: This is a 4 part analysis I wrote as an assignment for a strategy course. It looks at Epic Games, a game development company, through the disruptive strategy theories of Dr. Clayton Christensen, based on publicly available information.

I decided to share the analysis under the Creative Commons Attribution-NonCommercial-NoDerivatives-4.0 International (CC BY-NC 4.0) license, as a response to recent events (#FreeFortnite), in hopes it could be of use to the company in its efforts to disrupt the gaming industry.

Appendix A: Corporate Structure Example Applying the Theories

As an example exercise to illustrate the previously described, consider the figure below and how the core and respective business units are modularized around the customer segment’s job to be done.

Figure 5: An example of how new business units could be created to tailor each segment using Disruptive Innovation, Jobs to Be Done, and Interdependence and Modularity Theories. Each business unit should hire resources, create processes, and define a profit formula tailored to provide an integrated experience for its segment’s job to be done and optimal decoupling point.

The core business can remain as the main entity, but three new disaggregated business units are created: one tailored to indie developers, another to target the non-games enterprise sector, and a third one to target indie players (as an example).

Epic Games: The core business, being tailored to the AAA business job to be done, maintains new Unreal Engine releases as a product and continues to run the sustaining business with a deliberate strategy.

  • The core business continues to offer top-tier experiences to their AAA customers, and integrates its value chain to partners and providers.

Unreal Indies: A new business unit, akin to a business accelerator, is created to target the indie developers’ jobs to be done to train, support, and select the best indie developer teams.

  • The evangelism team and communities are deployed to provide hand holding, mentoring, and progress tracking to promising teams.

Unreal Enterprise: A third business unit, tailored to high-end non-games enterprise, can be created for that segments’ job.

  • An enterprise studio is created with resources, processes, and profit formulas tailored to enterprise industries.

Epic MegaVerse: A fourth novel business unit is created to explore the performance criteria indies and players prefer.

  • It could initially tackle the indie player, on an as-a-service on demand model. This assumes a job to be done related to constant access to entertainment and online social gatherings.

Closing remarks

The disruptive innovation theory suggests that creating new business units or co-opting new entrants by blocking or acquiring them are ways to face disruption risk.

The integration and modularity theory also suggests that understanding the performance defining component of each industry is key to integrating towards a decoupling point.

The resource allocation process theory also suggests that managers don’t always control what a company invests in, since by the time an opportunity reaches them, it has already been filtered by the corporate culture.

The good money / bad money theory suggests that new business units should receive patient capital, where exploration towards nailing a job to be done is encouraged over rapid growth. The above suggestions should fit that criteria by balancing emergent and deliberate strategies.

As can be appreciated, these business unit examples, although separate, apply the theories to tailor each segment’s job to be done. Each unit requires separate resources, processes, and profit formulas to explore and then grow towards that job. The theories suggest such a structure will lead to successfully capturing future emerging opportunities.



Technology adoption, market creation, and capacity building in LATAM. Ecuatoriano.

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Technology adoption, market creation, and capacity building in LATAM. Ecuatoriano.