Fortnite Fever Rattles Activision Blizzard Ahead of Earnings

(Bloomberg) -- The moment of truth is almost here. Activision Blizzard Inc., the first big video-game company to report earnings since Fortnite fever took hold, is sure to reveal how disruptive the multiplayer survival game is -- or isn't.

KeyBanc analyst Evan Wingren is betting on the former -- that results at Activision, Electronic Arts Inc. and Take-Two Interactive Software Inc. will be affected -- at least in the near term. Epic Games' Fortnite, which had a peak of 3.4 million concurrent users as of February and 45 million players as of January according to a company spokesperson, hasn't been ignored by investors either. Since their mid-March highs, Activision has declined 14 percent while Take-Two is down 10 percent over the same period.

Still, many have brushed off what Jefferies analyst Timothy O'Shea called "undeniably the hottest game we've seen in years." The worst-case scenario has already been priced into Activision and Take-Two, O'Shea said, encouraging investors to buy the dip. Benchmark analyst Mike Hickey went even further, predicting the two stocks may have already bottomed.

Both Activision and Take-Two have highly anticipated releases planned for later this year, Hickey noted, and rumor has it that their games will eventually incorporate -- you guessed it -- a battle royale mode similar to that of Fortnite.

Activision reports its first-quarter earnings after market close Thursday. EA releases its fourth-quarter results on May 8, and Take-Two is set to report on May 16.

To contact the reporter on this story: Krista Gmelich in New York at kgmelich1@bloomberg.net.

To contact the editors responsible for this story: Courtney Dentch at cdentch1@bloomberg.net, Scott Schnipper, Brad Olesen

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