Analysts Believe “Unrealistic Expectations” Are Hurting AAA Companies

In this day and age companies and analytic firms are saying that single-player titles are dead and if AAA companies don’t sport a battle-royale mode without resembling Fortnite in their games, then they should prepare for a downfall. On the contrary side of that stance, some analysts have stepped forward to say that the real reason why AAA companies are hurting is because of “unrealistic expectations.”

Whether you trust them or not, publication outlet cnbc.com published a recent report titled “‘Fortnite‘ is not the only problem that major video game firms are facing, analysts say.” The piece examines the following key points:

  • The free-to-play video game “Fortnite” has shaken up the video game industry in recent years.
  • Its success has led some to question the future of major video game companies such as Electronic Arts, Take-Two Interactive and Activision Blizzard.
  • But analysts who spoke to CNBC mostly said the problems faced by the gaming heavyweights go beyond competition from Fortnite.

According to Newzoo — a marketing analytics firm specializing in games and esports — Senior Market analyst Tom Wijman, he doesn’t believe the reason why AAA companies are hurting is due to Fortnite’s success:

“I think the problem is … not just Fortnite. The main reason is that expectations are too high and Fortnite is an easy thing to point your finger at — but it’s not the cause of the problem.”

Wijman would go on to say that “every game is now being compared to Fortnite,” which he was followed up by Niko Partners’ analyst Daniel Ahmad saying “it would be foolish to assume that Fortnite is the one and only reason” for the troubles that the top gaming companies are facing right now.

Regarding the above conclusions made by the analysts, CNBC reached out to AAA companies such as Electronic Arts and Activision-Blizzard, but they did not respond to said requests.

Moreover, analyst Wijman would also say that the problem lies with “ballooned expectations” of these companies as well as “their shareholders,” noting that the recent “sell-down” was bound to happen — alluding to the direction AAA companies and shareholders have taken.

The report also touches on how “competing for time and money” might be a problem for the giants, but I think a good summary of the current state of game companies comes from a commenter named Coroscant72 on a similar piece/topic on website seekingalpha.com, which covers single-player games and SJW content. The user starts his comment off by saying:

“Single Player mode hurt sales….? Red Dead Redemption 2 says otherwise. There is a large market out there for single player/campaign type of games. It’s just when you try to be a single player game, try to be a multiplayer/battle royale game, try to cram loot boxes down your customers’ throats, and are more concerned about production timelines than actually putting out a good game, then of course it’s going to fall short. You have to actually make a good game for it to sell.

 

There may be a business model somewhere in what EA is attempting to do, and it may even find success for short periods of time, but of all the gaming companies out there, this is the last one I’d invest in long term. Especially with the current stretched valuation with optimistic assumptions included in that valuation.

 

Making their game free to play in an attempt to replicate the Fortnite success will get them player numbers. Gamers will try a free game, even if EA makes it. The question is will they have even 1/4th of the monetization success as Epic has had with Fortnite. There is a large crowd who will play the free game but not participate in any monetizing activities simply because it’s EA.

 

EA needs to get back to releasing finished games and games that understand their target audience, and don’t try to be everything for everybody. Lastly, for the love of God, keep the SJW politics out of games. Could you imagine if every title you made kept rambling on about Jesus and how you need to repent and be saved? Only a select small audience would buy it, as most would find it annoying. This new SJW cult religion is the same way. Only a select small audience isn’t fed up with that crap showing up in our movies/tv shows/games. Entertainment is when we’re trying to get a break from the world. Keep your cult religion out of it….. and make more money.”

With all of that said, do you believe that AAA companies and other forms of entertainment hold unrealistic expectations or no?

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