APEX LEGENDS: Following the recent news from Electronic Arts (EA) that it was launching a free-to-play battle royale shooter "Apex Legends," which is part of the "Titanfall" franchise, Stephens analyst Jeff Cohen told The Fly that he felt the move was positive for the game publisher. "My initial thought is definitely that it’s positive for EA," he said. "It’s certainly encouraging that they’re exploring free-to-play, which is obviously a model that’s had a ton of success with games like 'Fortnite.'” Cohen noted that the question on everyone's mind following the announcement was whether this new game would mean for a potential sequel to "Titanfall 2." The Fly notes that Drew McCoy, lead producer of "Apex Legends," told Eurogamer yesterday that developer Respawn is not currently making "Titanfall 3." Investors in Epic Games, which makes "Fortnite," include Tencent (TCEHY), KKR (KKR), and Disney (DIS).
ANTHEM: When asked about the potential success and importance of EA's upcoming online shooter "Anthem," particularly following a public beta where many players experienced technical issues, the Stephens analyst said that the game will be a "very important" for EA and the future of developer BioWare, considering the "big investment" made in the title. “The way I’ve been framing 'Anthem' is that it could be a positive catalyst that could improve the sentiment around EA," Cohen said. "Because I think the perception around EA in the past year and a half has been one of a lot of execution struggles. So, I do think it’s important that they have a clean release.” The analyst added that while the recent demo was a "disappointment from a technical perspective," a lot of feedback and metrics he's seen about the experience was "very positive" for those who didn't suffer technical problems. "We do still think that the game is going to be successful," he told The Fly.
BUNGIE: On the topic of developer Bungie gaining full publishing rights and responsibilities for the "Destiny" franchise from Activision (ATVI), the Stephens analyst said that the news "definitely caused people to take down numbers." "While it does make the Activision side of Activision Blizzard more dependent on 'Call of Duty,' we think overall [Destiny] was a franchise that had been lagging in recent quarters and over the past year,” Cohen said, adding that the publisher publicly aired its disappointment in the "Forsaken" expansion to "Destiny 2" in an earnings call. “We think that overall it was a good decision for those two companies who had been sort of butting heads,” Cohen said. “Maybe they didn’t see eye-to-eye on certain things around monetization in-game and stuff like that.” He added that it's "probably best" that Activision focuses on their own intellectual property.
FORTNITE: When asked about whether "Fortnite" continues to pose a threat to major publishers, Jeff Cohen said that there are still catalysts out there for major publishers to get their stocks "moving." “We definitely don’t ascribe to the notion that there’s only one company out there that can innovate," he told The Fly, pointing to EA new projects "Apex Legends" and "Anthem" as examples of innovation. “I do think 'Fortnite' is here to stay,” Cohen noted. “Will it continue to be this massive cultural phenomenon? Over time, that will probably wane. But Epic has done a great job continuing to innovate.”
SWITCH: The Fly asked Jeff Cohen if he believes we will see major publishers further embrace the Nintendo Switch (NTDOY), particularly given reports that the company is working on a smaller and cheaper version of the console. “I think we definitely will,” the Stephens analyst said. “As that player base builds out, it makes sense for the software providers to make games on it.”
STREAMING: When asked whether he thinks Nintendo and Sony (SNE) will invest more in streaming and cloud gaming technology given recent announcements by Microsoft (MSFT), Amazon (AMZN), and Google (GOOG), Cohen said he thinks the Japanese console makers "definitely will." He said he would expect Nintendo and Sony to build such services with the next generation of games, noting that cloud gaming is already a "major trend."
"Game On" is The Fly's weekly recap of the stories powering up or beating down video game stocks.
Keywords: video games, titanfall, anthem, apex legends, fortnite, switch, destiny