Game Over For The Gamers
Electronic Arts Inc. stock plunged toward its worst decline in more than a decade this week after the videogame maker missed holiday-season sales estimates and lowered its forecast. EA cut its revenue projections for the year ending March to about $4.75 billion from $5.20 billion, but analysts were looking for $4.88 billion. EA cut its annual revenue outlook as its newest "Battlefield" title sold about a million fewer units than expected, partly blaming competition from games such as "Fortnite" and "Red Dead Redemption 2".
Take-Two said its western adventure blockbuster "Red Dead Redemption 2" had sold 23 million units since its launch on Oct. 26. The company raised its full-year adjusted revenue forecast range to between $2.89 billion and $2.94 billion, but that was still below analysts' average estimate of $2.98 billion. In addition, Take-Two also issued a weak quarter outlook. The CEO of Take-Two, Strauss Zelnick had the nerve to say the company's sales have been unaffected despite "Fortnite's" massive popularity.
Both EA and Take-Two mentioned Fortnite in their conference call. Fortnite is the battle royale format, which allows dozens of players to battle each other to the death until the last survivor. Released in September 2017, Fortnite, which is a free game has over 125 million players and made over $1.2bn in its first 10 months of operation.
The move to make Fortnite a free download was an inspired decision by Epic, opening the game to new audiences beyond the die-hard gamer. But the question many still ask is how has a free online game made so much money in such a short period of time?
Here comes the clever bit: microtransactions. While Fortnite is free to play, Epic charges for new player outfits (known as ‘skins’), weapons, celebratory dances (‘emotes’) and even special missions. Bought with V-Bucks, items are only available for a few days at a time, making them all the more coveted. Players see others wearing something they like and, knowing it’ll soon be gone forever, they rush to buy it before missing out – a classic behavioural psychology trick.
Fortnite has proven the freemium model works, so EA and Take-Two should be concerned moving forward as it continues to influence their customer base.
So where is EA and Take Two headed, lets go to the charts?
The chart suggests if EA can get to the monthly supply at $117, short it to the monthly demand at $63.
The chart suggests if Take Two can get to the daily supply at $114, short it to the monthly demand at $73.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
o my, they only made 4 billion ?
thats SO sad ... i thought fortnite was that game that sued a 14 year old kid for cheating ?
no surprise the gods lash back at companies like that :)
Not quite sure, I know a rapper is suing them for stealing his dance.
Not quite sure, I know
A rapper is suing them
For stealing his dance.
- rollandthomas
I'm a bot. I detect haiku.
From what I know Tencent owns 40% share of Epic Games, the game approval institution in China has fortnite on it‘s radar for a year now. If they will release the game in China, I know for sure that they will go up a lot in value.
Also I am curious if Apex Legends will survive the hype phase which it is going through at the moment. It had 300.000+ viewers tonight on Twitch.
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Wow, if released in China, most certainly Epic Games will increase in value, but they should seek approval now while Fortnite is the hottest fad.
Nice one Rolland!
I hear the word "game" and my ears immediately prick up. It's no coincidence that the big names are mentioning Fortnite; a title which has very successfully harnessed the era of the microtransaction.
From a fundamental analysis perspective: The only thing more important than microtransactions is to harness the publicity (and therefore the money) of e-sports. Perhaps it is then no coincidence that as you publish a post like this, EA hires themselves a new Head of E-Sports commercialization: https://esportsobserver.com/ea-esports-commercialization/
Not to hijack your post, but if your readers are interested to know more about the commercialisation of the gaming world, particularly microtransactions, e-sports and the incorporation of cryptocurrencies, then they can read a three part series I wrote on the topic last year:
https://steemit.com/cryptocurrency/@bitbrain/how-to-win-the-game-of-cryptocurrencies-part-1
https://steemit.com/cryptocurrency/@bitbrain/how-to-win-the-game-of-cryptocurrencies-part-2
https://steemit.com/cryptocurrency/@bitbrain/how-to-win-the-game-of-cryptocurrencies-part-3
I love e-sports..in particular Madden. No worries adding additional content / links, I'm all about adding value to the Community.
Good man!
I have always heard that fontnite, maybe i will watch the gameplay on youtube to see how good it is
Yeah, it's all over the place.
Gaming has started their typical downward cycle as the hype of the “new” console generation is now over. It will take a new generation which is probably 3-4 years away to get it started again.
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Yeah, the hardware space has a limit shelf life, it's all about getting the games over the internet now.