Why You Can Think of It like Netflix
Posted by Mmoak2018 on May 19th, 2018
If you're not sure what to make of "Fortnite," the videogaming phenomenon that has become shorthand for battle-royale gaming, perhaps it might help to think of it such as Netflix.That's because while Netflix (NFLX) has become one of the principal ways people consume video, according to a Monday notice by analysts at Wedbush, it is basically moved them from 1 instrument for doing so to another.
"The emergence of Netflix didn't kill off television viewership, but functioned to expand overall ingestion of content that was filmed whilst taking some modest share from broadcast television screening," they wrote. "Similarly, we think that Fortnite has increased the overall gaming crowd, while partly cannibalizing engagement in different matches."
The battle royale genre, that has boomed in the U.S. within the last several months, has led videogame industry investors to question what impact games like "Fortnite"--free to play with , with in-game purchases--might have on conventional names purchased as one-offs or via subscription.
In the most bearish instance, it's massive upheaval. At the most positive, it is bringing more gamers in--and giving big-name publishers a new potential revenue stream.
"If we're right, a few of those new players will be drawn to the high quality experiences provided by [such firms as Electronic Arts (EA), Activision Blizzard (ATVI) and Take-Two Entertainment (TTWO) and people ought to see a lift purchases of games and consoles in the coming years.
A recent survey conducted for BTIG discovered that more than a fifth of "Fortnite" players weren't previously gamers; another 5 percent played monthly or even less.
Investors appear optimistic. A basket of games console videogame stocks monitored by Stifel recently traded around 26 times forward 12-month EPS estimate, representing a 50% premium to the S&P 500.
"Videogame publishers are definitely facing near-term competition from Fortnite Items," BTIG's Brandon Ross wrote in late April. " But, Fortnite's success reminds us, and even epitomizes the enormous opportunities for publishers attracted by connectivity, especially since they continue to transition into the matches as a support (GaaS) version. And, the learnings from Fortnite's success may really help the significant publishers at the GaaS transition and to unlock new expansion opportunities."
