How Sony Plans to Stretch Playstation 4 Beyond Hardcore Gamers

Sony Computer Entertainment America President and CEO Shawn Layden at PlayStation's E3 2014 Press Conference on June 9 in Los Angeles Photograph by Chris Weeks/Getty Images for Sony Computer Entertainment America

Around the time of last year’s Electronic Entertainment Expo, excitement about new gaming consoles from Sony and Microsoft was tempered by skepticism that people will keep paying big bucks for new consoles. Sony has quieted those concerns by selling over 7 million Playstation 4 consoles, claiming a significant lead over the 5 million in sales for Microsoft’s XBox One. Perhaps that gap explains why Microsoft is spending this year’s show still trying to convince hardcore gamers to buy consoles while Sony is branching out.

On Monday, Sony said it would bring Playstation TV to the U.S. this year and start an open testing period of Playstation Now, its cloud gaming service, at the end of July. Both services have been out there in some form already—TV is already available in Japan, and Now is currently in a private testing period—but the company hasn’t worked out the specifics for either yet. The still-developing products offer a look at how Sony thinks about the future of the video-game console business.

Playstation TV is the closest that Sony has come to competing with Apple TV or Amazon’s Fire TV, albeit with a heavier focus on sophisticated gaming. The device resembles other Internet TV boxes in size and price ($99 alone or $139 with a controller, memory card, and a game). It can be used to stream games from a Playstation 4 to another television in the same household. Sony put an emphasis on more family-friendly games that will run on the device, which will also run a number of yet-to-be-announced media applications. Playstation TV will also have older games available for download and will be able to stream games from Playstation Now.

The idea for Now—a service where people pay for digital access for games—has been around for years. In that time Sony has learned just how hard it is to pull off .

A streaming service called OnLive generated a lot of excitement before failing in 2012. Sony’s version is built by Gaikai, an OnLive competitor bought that same year. OnLive was largely felled by technical issues, but the big questions surrounding Sony’s service center on its business model. Sony says it plans to charge between $3 and $20 for access to games, which will be akin to digital rentals.

Michael Pachter, an analyst with Wedbush Securities, believes Sony will have a difficult time finding a price that game companies and gamers are both willing to live with. “I think that sets it up for failure, as I think that Sony will gain access to ‘good’ games only if they charge something like $5 per day for a rental, and I don’t see many gamers interested in paying that much,” he said in an e-mail.

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