How EA Changed the Game With Origin Access

Electronic Arts Inc. (NASDAQ: EA) is changing the game with its newest release of an online subscription plan for PC gamers. It’s called Origin Access and subscribers pay about $5 a month to sample new games before the release, receive discounts on purchases and get a few older games free. This is following the trend that has become popularized by Netflix and Spotify.

Ultimately, this service is an extension of Origin, EA’s online PC community and game store that has over 50 million members. It’s also essentially a PC version of EA Access, which launched in August 2014 and provides the same benefits for EA games on the Xbox One console from Microsoft Corp. (NASDAQ: MSFT).

In this medium, content is delivered digitally over the Internet as opposed to on a disc. More video game distributors are taking this approach, notably the Xbox One.

Full-game downloads make up 20%-to-25% of EA’s global sales, compared to 10%-to-15% last year. Industry wide, digital sales of PC and console games reached $4.75 billion last year globally, up from $1.42 billion in 2010.

It’s worth noting that gamers already have plenty of options in terms of online media. Sony Corp. (NYSE: SNE) developed PlayStation Now, which costs $19.99 a month and allows access to over 100 PlayStation 3 games from Sony and third-party developers. Nvidia Corp. (NASDAQ: NVDA) has a similar service for PC gamers called GeForce Now, which costs $7.99 a month and features a library of more than 50 older titles.

However not everyone is a winner from this, GameStop Corp. (NYSE: GME) is taking a loss on this announcement. GameStop primarily sells video games through its brick-and-mortar locations and online as well, so dealing in a digital distribution is somewhat out of the question for them.

Shares of EA were last trading up 2.4% at $65.74, with a consensus analyst price target of $82.68 and a 52-week trading range of $45.21 to $76.92.

Microsoft shares were recently trading up 1% at $52.85, with a consensus analyst price target of $57.66 and a 52-week trading range of $39.72 to $56.85.

Sony shares were last trading down nearly 2% at $22.92, with a consensus analyst price target of $41.50 and a 52-week trading range of $20.34 to $32.95.

Shares of Nvidia were last trading up 1.9% at $30.25, with a consensus analyst price target of $31.58 and a 52-week trading range of $18.94 to $33.94.

Shares of GameStop were last trading down 5% at $27.88, with a consensus analyst price target of $40.62 and a 52-week trading range of $26.31 to $47.83.