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4 Reasons Why 'Fortnite' Has Won Over Gamers

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4 Reasons Why 'Fortnite' Has Won Over Gamers
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The battle royale is underway the gaming world, and it could spell big business for the companies providing the hardware. The explosive popularity of Epic Games’ “Fortnite” has Loup Ventures managing partner Gene Munster predicting it will leave a lasting mark on the video game world. 

Why Royale Rules

Munster said there are four key reasons why “Fortnite” has captivated the gaming community:

  • It’s free to play and widely accessible to all gamers.
  • The relatively new battle royale format makes the games fun to play.
  • Frequent updates and additions make for a dynamic, high-quality experience.
  • There are no “pay-to-win” features, keeping the playing field level and fair.

“We believe these four factors will result in "Fortnite" being a top five game for the next several years,” Munster said.

Battle royale-style games like “Fortnite” pit dozens of players against one another in a setting in which only one victor survives each game. The format makes each game extremely tense and exciting, especially once players make it down to the final few survivors, Munster said. 

"Fortnite" is certainly not the first game to feature the style of competition, but it is the first battle royale game to become so popular that it grabbed investor attention.

How To Play It

Munster is one of several analysts to recognize the impact that the battle royale style is having on the gaming community. Last week, Bernstein analyst Stacy Rasgon said battle royale games like “Fortnite” and “PUBG” are good news for NVIDIA Corporation (NASDAQ: NVDA) and its high-end hardware business.

The competitive component of e-sports requires gamers to gear up with high-end chips, a trend Rasgon said is showing no signs of slowing down.

“We believe the e-sports audience is set to grow to over 550 million by 2021, with 250 million ‘enthusiasts’ and almost 150 million players (all increasing by 75 percent vs. 2017), with NVDA's current 100 million installed base potentially growing to 135 million-plus over the same time period due to rising popularity of e-sports."

Advanced Micro Devices, Inc. (NASDAQ: AMD) will also benefit from the rise in battle royale games and e-sports, but Nvidia currently dominates the high-end hardware market, Rasgon said. 

Bank of America analyst Vivek Arya also specifically mentioned “Fortnite” in a bullish Nvidia note last week discussing the booming demand for high-end graphics cards.

“We continue to see gaming as 15-20-percent growth opportunity driven by expanding user base, increasing game quality/graphics and new gaming formats (e-sports, ‘Fortnite,’ ‘PUBG’),” Arya said.

Publishers Taking Note

Stifel Nicolaus analyst Drew Crum recently said that video major game publishers like Electronic Arts Inc. (NASDAQ: EA) and Activision Blizzard, Inc. (NASDAQ: ATVI) are taking note of the success of “Fortnite."

“Looking ahead, we don't expect EA and other publishers to sit still, and suspect [second half of 2018] titles will feature battle royale modes,” Crum said.

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Oct 2018KeyBancMaintainsOverweightOverweight
Oct 2018BarclaysUpgradesEqual-WeightOverweight

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