EA, Activision Blizzard, and Take-Two have all welcomed the popularity of Epic Games' Fortnite, suggesting that it is succeeding by attracting new consumers to the market rather than stealing away their players. However, market research firm Superdata has called that into question in a blog post this week, saying it has found multiple indications of "material cannibalization across top incumbent franchises" as a result of Fortnite's success.
"First, there exists considerable overlap between the consumer profile of a Fortnite player and that of people playing League of Legends, Counter-Strike: Global Offensive, and Overwatch," Superdata noted. "Audiences that like these titles generally also enjoy watching others play on streaming sites like Twitch. In terms of online viewership, we're observing the following: in Q2 total hours watched were up +59% for Fortnite, compared to League of Legends (-19%), CS:GO (-51%) and Overwatch (-16%)."
The second point of concern for Superdata is that Fortnite's free-to-play console launches aren't simply driving huge gains in digital revenues; they're actually masking declines.
"Total digital console sales, here defined as the combined total of premium digital title and free-to-play sales for Sony PlayStation and Microsoft Xbox, were up +49% year-over-year compared to Q2 2017," Superdata said. "Quarterly sales for 18Q2 were +1% compared to +7% for the same period last year. Removing revenue generated by Fortnite on console changes that picture considerably. Without Fortnite, total digital console revenues in 18Q2 declined -6% year-over-year."
Even if Fortnite appears to be benefiting at the expense of other games, Superdata said Epic's shooter is not the root of the problem. Instead, it sees issues with how well the established franchises have acquitted themselves to an increasingly digital market.
"Where previously no execs admitted to a loss in player activity or spending, it is increasingly clear that the newcomer is taking market share from existing titles, in addition to adding new players to the market. After a period of growth, the market is set to return to its usual zero-sum dynamic. More so, instead of raising all the boats, several of the big tentpole titles are seeing a decline, suggesting that Fortnite has been obfuscating a broader market correction among incumbent game makers."