Experts believe that the recent crash in Activion Blizzard’s stock market value is due to Call of Duty players migrating to Fortnite.
Fortnite is the biggest pop culture phenomenon right now. It has taken the gaming world by storm. Gamers and celebrities both are flocking to the game. Unless you have been living under a rock, you know how Ninja streaming with Drake broke Twitch and gained over 680k concurrent viewers. In an interview with CNBC, Ninja also revealed that he earns over $500,000 a month. It seems like Fortnite is also breaking other games now. Activision Blizzard has lost about 6 billion dollars in a stock market crash. And experts believe it is due to Fortnite.
The stock is down by 10 percent, which means that investors have lost about $6.3 billion since March 12th. The reason cited by the Wall Street experts is that the player base of Call of Duty is moving to Fortnite.
But one Wall Street Firm believes that this is just a short term dip. Jefferies analyst Timothy O’Shea believes that these concerns are “overblown.” In his note to clients titled, “Buy the Dip; Fortnite Monetization Impact Overblown”, O’Shea wrote that he sees this as a buying opportunity for the shares of Activision Blizzard. “While our checks suggest Fortnite is indeed pulling some engagement away from Activision Blizzard, we think the monetization fears are overblown”, he writes. “The concern is Call of Duty and Overwatch gamers will churn to Fortnite. But we believe these game audiences, especially the hardcore ‘spenders,’ are less fluid than many investors believe. This looks like the classic short-term issue – we are predisposed to aggressively buy the dip given there is no change to our positive long-term stance on Activision Blizzard.”
Fortnite is having quite the run. The game surpassed PUBG in monthly revenue recently, even though it is a free to play game.