What happened 

It took more than a year, but Fortnite is starting to make some of the biggest names in video games a little worried about the future. In the past 24 hours, Electronic Arts (EA 0.94%) and Take-Two Interactive (TTWO 2.32%) have reported earnings and less than impressive guidance, causing their stocks to fall 13.3% and 13.8%, respectively, during trading on Wednesday. Not surprisingly, Activision Blizzard (ATVI) dropped 10.1% as investors worried that its earnings report next week won't meet expectations. 

So what

Let's start with Electronic Arts, which reported earnings first. Revenue for the quarter was up 11.1% to $1.29 billion, and the company swung from a net loss of $186 million a year ago to a gain of $262 million, or $0.86 per share. Analysts were expecting $1.94 per share in earnings on $1.8 billion of revenue. 

Gamer playing a video game.

Image source: Getty Images.

Over at Take-Two Interactive, revenue jumped 159.7% to $1.25 billion as Red Dead Redemption 2 took the industry by storm. Net income jumped from $25.1 million a year ago to $179.9 million, or $1.57 per share. Analysts were expecting $2.75 per share in earnings. 

What really had investors concerned was the guidance that both Electronic Arts and Take-Two gave for the full year. EA expects $4.875 billion in revenue, lower than the $5.2 billion estimates from Wall Street, and Take-Two said it expects $530 million to $580 million of revenue for the fiscal fourth quarter, well below the $606 million analysts expected. 

Now what

The fears investors had about Fortnite are finally showing in financial guidance, even if they haven't affected past results all that much. The game could generate $3 billion or more in revenue from the hardcore gamer market that companies such as Electronic Arts, Take-Two Interactive, and Activision Blizzard rely on for a huge chunk of their revenue. 

Management of all three companies tried to ease investor fears a quarter ago by arguing that Fortnite was attracting new players to video games and would grow the pie for the entire industry. That may not be the case in 2019, and Fortnite may be like a black hole, sucking all the energy out of other video games. 

Check out the latest earnings call transcripts for Electronic Arts, Take-Two, and Activision Blizzard.

The problem for video game companies is that they don't have an easy answer for Fortnite. The game benefits from having millions of active users, and the large installed base just attracts more customers. Building a new battle-royale game to compete could take years, and it would take a long time to build a similar user base. The industry may just have to wait until the popularity of Fortnite fades, and no one knows when that will be.