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A gamer plays the video game ‘Fortnite Battle Royale’ developed by Epic Games during the ‘Paris Games Week’ on October 26, 2018 in Paris, France.
“Fortnite” — a free-to-play online video game — has shaken up the gaming industry in recent years, catapulting itself beyond the sector into the wider socio-cultural landscape.
Its runaway success has led some to question the future of top video game companies such as Electronic Arts (EA) and Take-Two Interactive, as intense competition in the gaming space dents sales of industry heavyweights.
Earlier in February, shares of EA and Take-Two were hammered after they released third quarter earnings. Activision Blizzard also saw major declines for its shares that day.
Analysts say the problems faced by these top gaming firms go beyond the rising competition from Fortnite, which is made by Epic Games.
“I think the problem is … not just Fortnite,” said Tom Wijman, senior market analyst at Newzoo, a marketing analytics firm specializing in games and esports. “The main reason is that expectations are too high and Fortnite is an easy thing to point your finger at — but it’s not the cause of the problem.”
Wijman said that every game is now being compared to Fortnite, “but the way Fortnite exploded in terms of popularity, there is no comparison.”
It would be “foolish” to assume that Fortnite is “the one and only reason” for the troubles that the top gaming companies are facing, said Daniel Ahmad, an analyst at Niko Partners.
Take-Two Interactive declined to comment for this story, while Electronic Arts and Activision Blizzard did not respond to CNBC’s requests for comment.
