Activision's forecasts disappoint as battle with Fortnite, PUBG escalates

Activision Blizzard Earnings Reportedly Leak, Stock Trading Halted

The mention of Fortnite was inevitable given the game's unprecedented success - though it was more surprising to hear Activision Blizzard's Chief Financial Officer Spencer Neumann mention it in relation to revenue.

Fortnite, which has captured the attention of "10s of millions of users", is stealing some engagement from Call of Duty, and Activision Blizzard shares have tumbled 13% since March 9, when Activision Blizzard and Take-Two Interactive shares began selling off in conjunction over Fortnite competition and the broader tech stocks sell-off.

Ultimately, the biggest division of Activision Blizzard is Activision itself, which brought in $872 million in Q1.

Excluding items, the company earned 38 cents per share, beating the average analyst estimate of 35 cent per share.

Activision shares have lost almost 13 percent of their value since March 9, wiping off about $7.5 billion from its market capitalization. This is up from Q1 2017's revenue of $1.73 billion, an increase of 12%. The company predicts it will make $1.56 billion its next quarter, and $7.36 billion by the end of 2018. The mega-publisher of games like Call of Duty, Overwatch, Destiny, World of Warcraft, and other titles reported another record quarter with $1.97 billion in revenue Thursday during a conference call.

Epic Games' Battle Royale-style game, Fortnite, is taking the gaming community by storm.

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It's not just first person shooter games that are under fire from Fortnite's popularity. Take-Two is due to post its fiscal fourth-quarter results on May 16.

However, considering Take-Two's upcoming release of Red Dead Redemption 2, there is an opportunity for the company to bounce back.

The success of Fortnite: Battle Royale and PlayerUnknown's Battlegrounds has many in the gaming industry expecting big AAA franchises to start adopting the 100-player last man standing mode soon.

The future certainly looks bright for Activision Blizzard, as the company plans to bring more of their popular core brands to mobile, delve deeper into esports, and, of course, keep the Call of Duty money-printing machine running.

At this time, it's not quite clear whether Activision is working on an entirely new battle royale project of their own or whether they are simply thinking of adding such a mode to one of their existing properties. He maintained his outperform rating on Activision with a price target of 80.

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