There were three strong players as the game started – Activision Blizzard (ATVI), Electronic Arts (EA) and Take-Two Interactive (TTWO). But the underdog surprised them all, taking each down one-by-one. In the past one month, Activision stock is down 28%, Electronic Arts has declined 12% and Take-Two has plunged 20%.
All the blame – or credit, as you would choose to call it – goes to Epic Games, whose Fortnite has become the latest fad among the gaming community. Though all these gaming giants have their own successful franchises, they are finding it difficult to breach the battle royale trend that has caught up, primarily attributable to Fortnite and Player Unknown Battlegrounds.
An important factor that is pulling gamers towards Fortnite is the fact that it can be downloaded free of cost on mobile devices or gaming consoles, unlike its rivals. On the other hand, Epic Games is also making a killing by employing the strategy of in-game purchases.
Despite launching Call of Duty: Black Ops 4 in October with record initial sales, Activision seems particularly affected by the success of Fortnite. During the third quarter, the company reported 345 million in monthly active users, down 10% from last year. On a sequential basis, monthly active users edged down 2%.
Meanwhile, Take-Two’s stock plunge comes amidst the success of its newly-launched Red Dead Redemption 2, stressing the importance of innovative marketing strategies as much as gaming content.
The repercussions of Fortnite’s success is evident in game retailers too. Last week, GameStop (GME) shares tumbled 7% after the company slashed its full-year earnings guidance, driven by a dip in games by the big publishers.
The stock has plunged 28% so far this year.