It’s a game of survival, and Fortnite’s more than 45 million players are doing a number on Activision Blizzard Inc. and Take-Two Interactive Software Inc.
The soaring popularity of Epic Games’ multi-player online survival game -- currently the top ranking free game in Apple’s App store -- is weighing on the publicly-traded big boys. Take-Two is down 10 percent over the past week, and Activision 9 percent, versus the S&P 500 Information Technology Index’s 3.1 percent slide. Electronic Arts is faring better, down 2.4 percent.
Both Morgan Stanley and KeyBanc Capital Markets Inc. warned earlier this month that Fortnite’s gathering steam to the point where other companies may get hit.
"Interest around Fortnite accelerated sharply in the past month to the point where we see tactical risk to other publishers with leverage to multi-player games in Western gaming markets," KeyBanc analyst Evan Wingren said in a March 9 note.
But Benchmark analyst Mike Hickey is more optimistic. He notes that Epic Games’ Fortnite demographic is younger than Take-Two’s Grand Theft Auto Online. And Take-Two’s Rockstar label could release a high quality, differentiated version of Fortnite to entice gamers back into the fold, Hickey said, reiterating his buy rating and $130 price target.
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