Sony’s PlayStation Now Strategy: Everything Old Is New Again

Though videogames can be massive sellers (witness those billion-dollar debuts last fall for Grand Theft Auto V and Call of Duty: Ghosts), every title faces rapid obsolescence, at least in gamers’ eyes. Three years after hitting the shelves, even the hottest titles can look woefully quaint compared to the latest stuff. That creates a wildly different set of economic realities compared to Hollywood, where so much money is made from library titles, produced (and paid for) years ago and the sold, repackaged, and sold again on various distribution platforms around the globe.

But Sony’s game unit is now trying to make a similar library play with its deep collection of titles stretching back to the launch of the first PlayStation 20 years ago. Today Sony Computer Entertainment launched the open beta test of its PlayStation Now network, which will feature more than 100 updated, rentable versions of its older titles, including hits such as Spyro the Dragon from L.A.-based Insomniac Games.

The network has undergone closed testing for months, but as of today, it will be open for owners of the latest Sony game console, the PS4, and initially only in the United States and parts of Canada.

The company plans to then roll out the system to users of its other game-playing devices, beginning with the PlayStation 3, then the handheld PS Vita and the PlayStation TV, a $99 streaming device  the size of a pack of cards that Sony announced along with the Now service during the E3 conference in June. Eventually, the PlayStation Now will also reach Europe and Asia, and the service will run on some Sony TVs and other electronics devices. Titles will rent for between $2.99 and $19.99, though game publishers will determine prices. Sony also said it plans to create subscription options and to add more and newer titles as it goes.

The PlayStation TV could be a key part of the Now network’s success, at least for extending Sony’s game empire beyond the nostalgia that veteran players may have for a classic game that won’t otherwise run on their current machines.

This holiday, Sony will be packing the PlayStation TV – which streams the Internet to a video screen much like a Roku or Apple TV – with a game controller, memory card, HDMI cable and other goodies for $139.99, far cheaper than a top-of-the-line PS4 ($399) or its main competitor, Microsoft’s Xbox One ($499 with Kinect sensors). With the game network, the PlayStation TV will be able to play dozens of titles on any TV. And when Sony almost certainly adds video streaming functions, it will have a cheap device with a big library of popular games but also a device that can stream TV shows and movies and music (don’t forget Sony owns a major music label too).

The most vulnerable competitor will probably be Nintendo, whose struggling next-gen console Wii U is already trailing the PS4 by 2 million units despite debuting a year earlier. If the PlayStation Now and PlayStation TV combo creates a viable low-end alternative, Nintendo could find itself crunched. If Sony’s grand plan works, it will finally have figured out how publishers and developers can make money on their old titles without having to make a brand new game. And that will be quite a library play indeed.