Welcome to "Game On," The Fly's weekly recap of the stories powering up or beating down video game stocks. In this week's edition, The Fly held separate exclusive interviews with Benchmark analyst Mike Hickey and Wedbush Securities analyst Michael Pachter to gather their respective thoughts on a handful of topics in the video game sector. BATTLE ROYALE IMPACT: On the subject of the importance of Activision's (ATVI) "Call of Duty: Black Ops 4" having a Battle Royale mode called "Blackout," Michael Pachter said that "Fortnite," the most popular Battle Royale game on the market, has had a "limited impact" on the "Call of Duty" franchise. The analyst noted, however, that Fortnite "definitely cost [Activision] money" and that adding a Battle Royale mode to the latest "Call of Duty" release was a "defensive move." "The ancillary benefit of offering a Blackout mode is that it's possible that the 'Call of Duty' Battle Royale will monetize in a similar way as 'Fortnite' monetizes," the Wedbush analyst told The Fly. "Obviously, there's a much smaller player base. I've seen numbers that range from 85M-200M playing 'Fortnite, but 'COD' is going to have 25M people playing Blackout, a fraction of the size of Fortnite.'" Pachter added that the Blackout mode of "Call of Duty: Black Ops 4" probably adds "modest incremental revenue, [maybe] $100M-$200M total, not $2B." Meanwhile, Benchmark's Hickey said that "Call of Duty" having a Battle Royale mode is a "huge deal" and "probably a game changer." The analyst noted that there was some concern that "Black Ops 4" was launching during a "very competitive" release slate and that there was immediate concern that the game lacked a single-player campaign, but that those concerns were alleviated when the Blackout beta went live. "I think that reshaped players' opinions in terms of the value and excitement to purchase and play the game," Hickey said. "So it's a huge, huge deal. And keep in mind that 'COD' has traditionally been the biggest shooter franchise on consoles, with 'Black Ops' being the biggest sub-franchise. And now you layer the Battle Royale mode in the game, and Battle Royale is the hottest mode in gaming today with 'Fortnite' and 'PUBG.' So it looks like they've nailed it." Epic Games, the creator of "Fortnite," is 40% owned by Tencent (TCEHY) and is part of Disney's (DIS) Accelerator Program. BATTLEFIELD V RELEASE: Responding to the speculation that Electronic Arts (EA) moved the release date of "Battlefield V" to get out of a particularly competitive release schedule, Benchmark's Hickey suggested that there was some truth to the speculation, noting that moving the game's rollout to November gave the game "some room to breathe." "I mean, adding polish to a game and giving it more time can always make sense, so at the end of the day it's probably going to be a little better later than it was earlier," Hickey told The Fly. "But I think the real scenario is that they had it right in between 'COD' and 'Red Dead' (TTWO), and that's not a spot you want to be [in]." On the other hand, Michael Pachter said that such speculation is "just idiotic." "I know a lot of my competitors think that," the analyst said. "They're just morons. Sorry, it's wrong." Pachter contended that there is "very little" overlap between "Black Ops 4" and "Battlefield V," saying that "almost nobody would buy both." The analyst said that "Battlefield V" was "broken" and needed time to be fixed. Pachter added that he doesn't believe "anybody's afraid of 'Red Dead.'"
