Activision Inspired By Innovative 'Fortnite: Battle Royale' Success

  • Activision Inspired By Innovative 'Fortnite: Battle Royale' Success

Activision Inspired By Innovative 'Fortnite: Battle Royale' Success

Video game stocks rose on Friday after an upbeat report from Activision Blizzard (ATVI) eased concerns that "Fortnite Battle Royale" from privately held Epic Games would hurt the major publishers. Since it hit a peak of $77.82 earlier in the year shares of Activision Blizzard have fallen by around 15% over concerns that its popular franchises would be abandoned in favor of Fortnite. "The idea of new competition is going to be a staple for gaming", he said.

"Gaming is constantly evolving and innovating, which often expands the marketplace, and the success of "Fortnite" is no exception", said CEO Bobby Kotick.

Though Activision didn't get into too much detail, the publisher, by way of CFO Spencer Adam Neumann, has admitted that Fortnite's popularity has "impacted" it. This is up from Q1 2017's revenue of $1.73 billion, an increase of 12%. Shares of the two companies have been hit hard in recent weeks, but Jefferies sees their dips as a buying opportunity, saying the worst-case scenario is already priced into their stock prices.

Shares of the company were down 1.5 percent at $65.80 in extended trading.

The Santa Monica, Calif. -based firm earned an adjusted 38 cents a share, up 23% year over year.

Total adjusted revenue rose to $1.38 billion from $1.20 billion.

However, considering Take-Two's upcoming release of Red Dead Redemption 2, there is an opportunity for the company to bounce back. Electronic Arts is scheduled to report its fiscal fourth-quarter results on Tuesday. The decrease in value is due to fears that Fortnite will affect quarterly results.

Battle royale games are multiplayer online games where the virtual combatants fight to the death to be the last one standing.

Of course, no single title is more relevant in the shooter genre than Epic Games' cultural phenomenon Fortnite Battle Royale - a fact that Activision Blizzard immediately commented on during its Q1 financial review conference call yesterday.

Ju reiterated his outperform rating on Activision and raised his price target to 85 from 84. The most popular title which was credited with being the driving force was Call of Duty and particularly Call of Duty: World War II. He added that Activision Blizzard's own portfolio of games is diversified with free-to-play and paid games alike, along with other revenue streams from things like add-on content and microtransactions.