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Is Fortnite’s HUGE Success Hurting Activision? Could It Help It In The Long Run?

Will Activision have a surprising next quarter? Will it continue its long uphill trend or will their next quarter earnings falter?

For countless years, Activision has dominated the gaming industry, as its stock has continued to break records and push higher. Nothing has been able to halt Activision’s rapid growth, however it may have just met its match: Fortnite.

Fortnite has taken the world by surprise and has dominated the gaming industry. Fortnite is a multiplayer game in which players can team up with friends to work as a team to become the sole survivors out of 100 starting players. The game has not only captivated the gaming community, but has also attracted many who weren’t involved in gaming before.  

As of January 15, 2018, Fortnite recorded 40+ million users. This is an incredible feat since they just released the game on July 25, 2017. How did they do it? First, they created a great game that people enjoy playing. But what separates Fortnite from most great games is that it’s free. This raises the question, are zero dollar entry level games the wave of the future? Will we see other games shift their revenue streams to capitalize on in game purchases similar to the Fortnite model. Additionally, why would someone pay 40 dollars to buy the new Black Ops (one of Activision’s top selling games) when companies are creating great games for free.

How will Activision be affected by Fortnite in the short term?

Fortnite’s exponential growth in popularity and traction may have a negative impact on Activision in the short term. Captivating much of the gaming community, Fortnite may hamper the sales of Activision as many will be reluctant to spend money on paid games when they can both play for free and play with their friends on Fortnite.

Are there any positives for Activision in regards to Fortnite?

Fortnite may be a negative for Activision in the short term, however, there could be possible positives to look for in the long term. From personal experiences, we have seen many people that weren’t into gaming before venture into the industry because of Fortnite. What percent of Fortnite’s 40+ million users are new gamers is unknown. Activision could turn Fortnite’s wild success into a long term positive by working to captivate the new market share of gamers created by Fortnite. As Fortnite’s popularity may fade, Activision has proven to be a strong company in the gaming realm throughout the years. If this happens, Activision has the potential to capture the new market share by selling games to these people who hadn’t previously bought games.

Will Fortnite impact Activision in the short and or long term? Or will it have no effect at all?

Disclaimer: Do not invest your own money without doing your own research, our content is not meant to convince you to buy or sell a stock, but simply to share ideas and unique viewpoints.

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