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GameFly takes another shot at Sony with Samsung deal

Samsung Smart TVs now offer GameFly game subscriptions a well as Sony PlayStation NowSamsung Smart TVs now offer GameFly game subscriptions a well as Sony PlayStation Now
Samsung Smart TVs now offer GameFly game subscriptions a well as Sony PlayStation NowGameFly

Game subscription service GameFly is expanding its streaming game service by partnering with Samsung (SSNLF) . GameFly is now available on Samsung smart TVs in 20 markets.

This puts GameFly in direct competition with Sony’s PlayStation Now game streaming service, which is also available through Samsung’s smart TVs.

GameFly acquired streaming company Playcast in June 2015, which previously had a game streaming deal with Samsung. GameFly CEO Hodess says those agreements became GameFly agreements after the acquisition. GameFly also began streaming its game bundles across Amazon Fire TV in June 2015.

Analysts, however, says GameFly needs to improve it service, not just land more partnerships, if it truly wants to compete with Sony (SNE).

GameFly has said it wants to become the Netflix of gaming, but EEDAR video game analyst Matt Diener says Sony’s offering is actually much closer to that entertainment giant. PlayStation Now offers subscriptions of $20 per month or $45 per quarter to have unlimited access to over 130 games. GameFly offers smaller bundles of games for either $7 (for seven titles) or $10 (for up to 16 titles) per month.

“PlayStation Now offers a much closer ‘all you can eat’ experience to Netflix,” Diener says. “Unless GameFly broadens its approach to move beyond bundles, I think smart TV consumers will ultimately be disappointed with the variety of titles they have access to when they subscribe.”

GameFly has a strong user base, however, even without streaming. Wedbush Securities analyst Michael Pachter estimates GameFly has 1 million customers using its mail-in, disc-based rental service. And Diener says the streaming service hasn’t impacted this business at all. But outside factors could be impact how well GameFly does in the streaming market.

 

“Despite GameFly’s innovative distribution and business model, we don’t foresee a big impact on the existing digital console offerings like PSN,” SuperData Research CEO Joost van Dreunen, says. “This is largely an issue of timing. We’re approaching the zenith of the current console cycle, which means that most of those consumers who were going to invest in new hardware to get their hands on next gen titles already have.”

And adding more games may not be enough to improve GameFly’s chances in the market, according to van Dreunen.

“Similar to Netflix, GameFly will have to offer something special to draw a substantial user base,” van Dreunen says. “Certainly a broad offering will help, but a unique one will always be more persuasive.”

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