A desperate analyst trying to make EA seem like Netflix:

How This Videogame Company Could Become 'Netflix Lite' -- Barrons.com

4:04 pm ET July 31, 2017 (Dow Jones) Print

By Emily Bary

It seems like ancient history now, but Netflix had to take a big risk to become a media powerhouse. The company upended its DVD-rental business in order to embrace a streaming strategy. Is Electronic Arts ready to make a similar move?

The videogame giant may not be ready to give up on discs entirely, but it sees value in streaming games, and that has some on Wall Street excited.

In a note titled "Netflix Lite?" Needham analyst Laura Martin commended EA's focus on its streaming-subscription business, EA Access, which allows users to play a collection of EA games for $5 a month or $30 a year.

Unlike with Netflix, though, EA's streaming business is about more than just the membership fee. Newly launched titles aren't made available through the service right away, so true fans will still buy those outright. Instead, EA tries to hook members on new games after their big selling windows have ended. The goal, presumably, is to generate in-game spending on these older titles and create new fans who might then pay up for the next installments.

Streaming members also get discounts on digital content and can play trial versions of upcoming titles before they launch. Those trials help hook players on new games that they'll then have to buy if they want to continue playing. Plus, EA gets an early indication of gamer sentiment.

On the company's earnings call last week, CEO Andrew Wilson talked up EA's progress so far in streaming and said that the company was looking into ways of expanding such services down the line: "You should expect us to continue to push in growing the opportunities in and around subscription and delivering more value for our players."

For Netflix, DVD rentals represented all of the company's revenue in 2006, and just 6% a decade later. Surely Wilson knows the history.