February 13, 2019 / 11:19 PM / 3 months ago

EA's new game 'Apex Legends' is taking a shot at 'Fortnite'

(Reuters) - “Apex Legends,” the latest hit title by gaming company Electronic Arts Inc, is shaking up the online battle arena, but questions are lurking about how much fire power it has in the long-run and whether it can dislodge popular “Fortnite.”

After thrilling investors with its meteoric launch, “Apex Legends” fell briefly to the second spot Wednesday on streaming game site Twitch before retaking the crown.

Though the game was outdrawn by “Counter-Strike Global Offensive,” an older military shooter game with a solid e-sports fan base, it has made a strong showing on Twitch, hitting 688,000 peak live viewers - meaning that many people were watching others play the game on the streaming platform.

“Apex Legends had a massive first week on Twitch. It generated more hours watched than any other game during its launch week in our history,” Michael Aragon, Twitch’s senior vice president of content, said in an email.

Investors are closely watching signs of engagement with “Apex Legends” after driving EA shares up 27 percent on reports that the game, released 10 days ago, had drawn 25 million users in its first week.

That was more than twice the number the hugely popular game “Fortnite” signed up in the two weeks after its initial 2017 release. Like “Fortnite,” “Apex Legends” is a free-to-play so-called battle royale format, where dozens of players are dropped on an island to battle to the death.

The initial sign-up numbers for “Apex Legends” had cheered EA investors after its latest earnings report showed weak sales from “Battlefield,” a more traditional EA offering.

EA shares were flat Wednesday.

Fortnite’s popularity - it has taken middle schools by storm and has an estimated 200 million players worldwide - had shaken an industry built on selling individual game titles for $50 or more a pop. While the game is free to download and play, users pay for upgrades, like the “skins” displayed on characters. Joost van Dreunen, co-founder of SuperData, a Nielsen Company, estimates that in 2018 “Fortnite” raked in $2.4 billion in revenue, more than any other single title.

Spencer Guy, an 18-year-old high school student in Montgomery, Alabama, said he has spent about $200 on upgrades while playing “Fortnite.” He said he loves the fast pace of “Apex Legends” and that it is not plagued by bugs the way “Fortnite” was. But so far, he said, he has spent “not a penny” on “Apex Legends.”

FILE PHOTO: An Electronic Arts (EA) video game logo is seen at the Electronic Entertainment Expo, or E3, in Los Angeles, California, U.S., June 17, 2015. REUTERS/Lucy Nicholson/File Photo

Analysts question whether “Apex Legends” can dislodge “Fortnite,” which is developed by Epic Games.

“‘Fortnite’ skews much younger and much more female because it’s cartoony and the violence isn’t violent. When you kill a character it says you’re out, it doesn’t say you’re dead,” said Wedbush Securities analyst Michael Pachter.

Pachter also wonders if users will pay as much for upgrades like skins in a first-person shooter game where only the character’s hands and gun is in view.

Reporting by Jane Lanhee Lee; editing by Greg Mitchell and Lisa Shumaker

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