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Social media ‘social norm’ helps or harms Gamefly?

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By: Will Wei, CNN • Updated 15th April 2016

Whether you’re an obsessive player or just searching for a discounted console, this week’s rumors are driving game-changers.

Not least of which is the rise of a rabid online social community obsessed with “Call of Duty: Infinite Warfare,” that’s causing Wall Street firms to send shockwaves through the video-game market.

The rise of internet trolls has now spawned a mysterious “act of God” — a group of kind-hearted volunteers that’s completely destabalizing the investment community.

One of these is called Gamefly, a video game rental service for existing customers. The hope is to get current subscribers to rack up enough game hours for them to sell their equipment to someone else at a discounted price.

The strategy is quickly proving to be the perfect “Eat, Pray, Love” for Gamefly, which has been flying below the radar for the last few years.

But new reports from video game sites have questioned the company’s ability to make enough revenue to weather the storm.

Could the organization cash out at a lower price than originally planned?

Market analysts at Piper Jaffray have started to question Gamefly’s and other “social-norm free” rental companies’ viability, raising serious concerns about the companies’ ability to borrow money at favorable rates.

All of this adds up to the most significant rise in Gamefly’s stock in six years. On Thursday, shares jumped 21%, above $11.50 a share, before closing at $12.49.

The company’s current outlook, according to the Wall Street Journal, is for fourth-quarter revenue of $186 million, down 7% from last year. The analysts say they expect Gamefly to lose $17 million for the quarter.

This is causing drastic change in the video game industry, analysts say. Not only does Gamefly’s online game community threaten the value of its customers, but it’s also encouraging game developers to aggressively try to acquire customers at lower costs.

In particular, Rocket League, a small-scale, but popular video game involving soccer, has been one of the social media mainstays.

No fewer than a dozen Rocket League games now exist on YouTube. All have huge followings.

An example is viral video, the “Ball Star,” a 15-second clip that’s amassed more than 7 million views in just three days.

One senior employee at one of the developers says Rocket League has boosted revenue for their company by as much as 20%.

And of course, there’s always “Call of Duty: Infinite Warfare,” the latest iteration of “Call of Duty.”

That popular war-inspired shooter seems to be in desperate need of marketing.

The forthcoming video game, which is billed as the biggest modern-day war story, has been receiving derision on the internet.

Call of Duty fans have been rallying on Reddit, denying Activision’s boast that Infinite Warfare will have more “epic moments than any other Call of Duty game.”

They’re using the site as a form of anonymous criticism. And, according to the Wall Street Journal, the backlash has caused some financial concerns for investors and reduced enthusiasm for the game.

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