Mattel’s Fortnite Gambit: Unlocking Metaverse Revenue for Toy Brands

In 2025, Mattel’s foray into the metaverse via Fortnite marks a pivotal shift in how toy brands can monetize intellectual property (IP) in virtual spaces. By launching Masters of the Universe: He-Man Heroes—its first official island in the game—Mattel has tapped into a platform that generated $6 billion in revenue in 2025 alone, driven by in-game purchases, live events, and brand collaborations [1]. This move aligns with Fortnite’s established model of monetizing virtual experiences, where cosmetic items and limited-time events generate up to $1.5 million daily [1]. For Mattel, the collaboration represents more than a marketing stunt; it is a calculated step toward transforming its legacy as a toy company into a metaverse-driven IP powerhouse.

The Fortnite Metaverse: A Proven Revenue Engine

Fortnite’s success lies in its ability to blend entertainment with commerce. The game’s free-to-play model incentivizes players to spend on cosmetic items, seasonal Battle Passes, and exclusive events. For instance, a single in-game concert, such as Travis Scott’s "Astronomical" event, can generate over $20 million in a day [1]. This ecosystem is further amplified by Fortnite’s creator-first approach, allowing players to design and monetize their own content through Creative Mode, with 5% of proceeds going to creators [4]. For IP holders like Mattel, Fortnite’s platform offers a ready-made audience and a frictionless monetization framework.

Mattel’s Masters of the Universe island, which allows players to collect Shards of Eternia and summon heroes, leverages Fortnite’s existing infrastructure to create a self-sustaining revenue stream. While specific revenue shares from the collaboration remain undisclosed [2], the broader Fortnite ecosystem demonstrates the potential for IP-driven content to generate recurring income. For example, LEGO® and Netflix have already participated in Fortnite’s IP partner licensing program, receiving a portion of in-game sales [5]. This model suggests that Mattel could benefit from a similar arrangement, with a share of proceeds from in-game purchases tied to its characters and narratives.

Mattel’s Strategic Turnaround: From Toys to Digital Play

Mattel’s Q2 2025 financial results highlight both challenges and opportunities. Despite a 6% revenue decline to $1.019 billion, the company achieved a 50.9% gross margin and reported strong international growth, particularly in Asia Pacific and Latin America [3]. These figures underscore the importance of diversifying revenue streams, a goal accelerated by its metaverse initiatives. The Masters of the Universe collaboration is part of a broader strategy to integrate AI, digital games, and global entertainment partnerships into its business model [3].

By entering Fortnite, Mattel is not only extending the lifespan of its IPs but also creating new touchpoints for engagement. The game’s 44 million peak players in 2024–2025 [4] provide a massive audience for brands to connect with, bypassing traditional retail limitations. For toy brands, this means shifting from one-time product sales to ongoing digital interactions that can drive repeat revenue. Fortnite’s ability to host virtual concerts and branded events further illustrates how IP can be monetized through experiences rather than physical goods [1].

The Bigger Picture: Metaverse as a New Frontier

The metaverse is projected to grow to $13 trillion by 2030, with gaming alone expected to reach $260 billion by 2026 [2]. Fortnite’s dominance in this space—bolstered by $2 billion in funding from Sony and KIRKBI [4]—positions it as a critical platform for brands seeking to future-proof their IP. For Mattel, the collaboration is a test case for how toy brands can adapt to a digital-first world. If successful, it could pave the way for similar ventures in other metaverse platforms, such as Roblox or Decentraland.

Conclusion: A Win-Win for Brands and Investors

Mattel’s Fortnite collaboration exemplifies the metaverse’s potential to redefine IP monetization. By leveraging Fortnite’s proven revenue model, the company is creating a new income stream that complements its traditional toy sales. While the financial details of the partnership remain opaque, the broader trends—Fortnite’s $6 billion annual revenue [1], the metaverse’s explosive growth [2], and Mattel’s strategic pivot to digital entertainment [3]—suggest a compelling long-term opportunity. For investors, this signals a shift in how toy brands can thrive in a digital age, where virtual experiences and recurring revenue models replace one-time transactions.

Source:
[1] Fortnite Revenue Breakdown: Key Insights & Usage Statistics [https://www.tekrevol.com/blogs/fortnite-revenue-usage-statistics/]
[2] Mastering Gaming & Metaverse Investments in 2025 [https://tsginvest.com/emerging-technology/gaming-metaverse/]
[3] Mattel Reports Second Quarter 2025 Financial Results [https://investors.mattel.com/news/news-details/2025/Mattel-Reports-Second-Quarter-2025-Financial-Results/default.aspx]
[4] Fortnite Developer Epic Games Gets $2B To Drive Metaverse Efforts [https://blockworks.co/news/fortnite-developer-epic-games-gets-2b-from-sony-kirkb-to-drive-metaverse-efforts]
[5] IP Partner Licensing Program Fee Schedule [https://create.fortnite.com/news/ip-partner-fee-schedule]