What happened

Last week, shareholders of Electronic Arts (NASDAQ:EA) stock were treated to a 13% pop on news that the company's Fortnite killer, Apex Legends, attracted 10 million new players in its first 72 hours on the market.

Well, Wall Street took notice. This morning, investment banker Merrill Lynch announced it is upgrading Electronic Arts to buy based on the success of Apex Legends, while down the Street at Piper Jaffray, analysts upped their price target on EA stock to $99 a share.

Check out the latest earnings call transcript for Electronic Arts.

Gamer girl pumping fist at a console

EA investors are pumped over Apex Legends' early success. Image source: Getty Images.

So what

Of course, with Electronic Arts stock now trading at $103 as of 11:40 a.m. EST (and up 5.5% off Friday's close), the fact that Piper thinks the stock is worth $99 seems kind of a letdown. For that matter, even Merrill Lynch's suggestion that EA stock could climb as high as $110 seems kind of underwhelming -- even if Merrill is right, that would still work out to less than a 7% gain for buyers.

Now what

And of course, as fellow Fool contributor Travis Hoium pointed out at the start of this buying frenzy last week, by this point practically "every major game developer is trying to copy [Fortnite's] battle royale concept." Competition is heating up, and there's no guarantee that EA will be able to hold on to its early gains in the field.

After all, "free-to-play" may make it easier for a company like EA to convince players to switch from one game (Fortnite) to their game, because there's little switching cost. But that fact makes it just as easy for those same players to switch right back, or to mosey even further down the road, just as soon as Activision or Take-Two invent an even shinier free-to-play object.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.