This presents challenges for rival video-game companies Activision Blizzard, maker of Call of Duty, and Take-Two Interactive, owner of Grand Theft Auto Online (GTA Online). Activision Publishing president Coddy Johnson added that the battle royale mode is "contributing to innovation within the industry", going on to say it is helping bring new, younger games to video games. Activision CEO Bobby Kotick acknowledged that shortcoming today with Bloomberg, saying that "Fortnite is definitely a lot of competition right now".
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. In fact, it amounted to more than $1 billion, as confirmed by an investor call which can be read on Seeking Alpha.
The Santa Monica, Calif. -based firm earned an adjusted 38 cents a share, up 23% year over year. The company posted their best Q1 results of all time, serving up revenue of $1.97 billion (up from $1.73 billion in Q1 2017) and net income of $500 million (up from $436). The company predicts it will make $1.56 billion its next quarter, and $7.36 billion by the end of 2018.
Activision shares have lost almost 13 percent of their value since March 9, wiping off about $7.5 billion from its market capitalization. Among other video game stocks, EA climbed 2.9% to 123.64 and Take-Two increased 3.5% to 108.76.
Dow Jones Newswires, the professional business information service operated by the Journal's publisher, inadvertently published select earnings results, including an incorrect revenue number, for Activision's latest quarter ahead of their scheduled release.
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The company more than likely made enough money off the game's initial release to cover the costs of the game.
How is Epic Games Able to Offer Fortnite for Free?
Activision, which has on more than one occasion said that it's keenly aware of the success of battle royale games, has talked a bit more about how it sees the subgenre.
Baird analyst Colin Sebastian said "Fortnite" concerns appear "overblown". The most popular title which was credited with being the driving force was Call of Duty and particularly Call of Duty: World War II.
"We note Activision's historical success as a "fast follower" (e.g., music games, mobile) providing a degree of confidence that the company will find success in the new mode, where affinity for established franchises can be leveraged to drive higher engagement levels with new gameplay", Sebastian said in a report.