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Master the Meta: Garena Free Fire publisher Sea’s earnings breakdown

Garena Free Fire boasts 100 million daily active users

Master the Meta: Garena Free Fire publisher Sea’s earnings breakdown

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I was dumbfounded to learn that Garena Free Fire posted over 100 million daily active users this past quarter - 100 million DAUs!

That’s 68.7 million more than the entire Epic Games Store (Fortnite, Rocket League, etcetera.) in December 2020.

The only comparable title is TiMi Studio’s Honor of Kings, which has in the past logged 100 million DAUs.

Free Fire has been the highest-grossing mobile game for the past seven consecutive quarters in the fastest growing gaming markets in the world: India, Latam, and Southeast Asia.

Sea Limited isn’t by definition a games company either. I can’t underscore how significant gaming is to the underlying business infrastructure, though.

There’s a virtuous flywheel that’s activated when a Free Fire player makes an in-game purchase through Sea’s ShopeePay.

There’s a virtuous flywheel that’s activated when a Free Fire player makes an in-game purchase through Sea’s ShopeePay, from which the same profile can then be used to purchase through their ecommerce or food delivery businesses.

Payment frictions are removed, user profiles are saved, and APRU increases in a notable way; to this end, these gaming profits have subsidised the ecommerce business, which as a result, has been able to blitz market share in Southeast Asia and Latam (’s turf).

Tracking bookings almost feels misleading because of the ecosystem play, but let’s dive specifically into the Free Fire details:

  • It logged 100 million daily active users and 650 million quarterly active users, growing 61 per cent year-on-year
  • Quarterly paying users grew by 123.5 per cent year-on-year to 79.8 million, representing 12.3 per cent of QAUs and up from 8.9 per cent in Q1 2020
  • Bookings were $1.1 billion, up 117.4 per cent year-on-year
  • Average bookings per user were $1.7, compared to $1.3 Q1 2020 (in part due to IP partnerships)

Strategically, Free Fire is firing on all cylinders. It has a robust esports ecosystem (Garena World drew 1.2 million concurrent viewers), burgeoning IP partnership agreements (Holi Festival, Egyptian singers, manga like Attack on Titan and One Punch Man), and engaging gameplay.

Further, in light of Fortnite’s unavailability on mobile, Free Fire has increased its North American/EMEA market share, which bodes well for average revenue per user in countries that typically spend more money.

And despite pandemic lockdowns easing globally, time spent per DAU is still up significantly compared to pre-pandemic levels, and new cohorts are monetising at a quicker and deeper penetration than older cohorts. This only bodes well for the business.

Much like Fortnite, Free Fire has evolved out of the bounds of a battle royale. While battle royale remains its core product, an Among Us-esque game is set to launch, friends go to hang out in the title’s digital worlds and the game’s shared language removes culture barriers in local contexts.

It’s interesting to compare both Fortnite and Free Fire because strategically they serve similar purposes: games that function as a cash cow/top of the funnel for other parts of the business, but have also defined a cultural zeitgeist.

Sea’s Chief Corporate office Yanjun Wang says it best when describing Free Fire’s potential.

"Our focus is to continue to promote a massive-based online platform and an online community and provide them with content and opportunities for socializing engagement, trial different modes of games, trial different characters, avatars, or having different ways of playing."

Can Garena create another big hit? I’m particularly keen to see how Sea’s gaming division continues to innovate against their keystone title in a global setting. Garena boasts a large, 1000-person development team and deep learnings in free-to-play/live ops experiences across a variety of local environments.

In the coming months and years, we should expect new IP to launch. It has done some successful M&A in the past, but it’s yet to be seen what learnings they can bring to the table as Free Fire matures, and what might happen to Garena as a result. (Written by Fawzi Itani)

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