Sony made an interesting announcement at the E3 gaming conference in Los Angeles last week. The company presented its Playstation TV set-top box that will enable users to watch video content, stream games, and remotely play their Playstation 4 consoles on other TV’s. FYI, the Playstation TV is just the North American/European version of Vita TV that was launched in Japan last year. The device starts at $99 dollars but with a controller it comes out to $139, similar to the Amazon Fire. So why bother writing about another device? I think that Sony may actually have the leg up in this game, especially when you take into consideration the massive reach and niche focus in gaming.
There are plenty of companies competing in the connected device and set-top-box space; Roku, Google (Chromecast), TiVo to name a few. (You can see a full list of companies here — scroll down to “Set-Top Boxes and Connected TV Devices.”) What can Sony’s product do that’s different? Gaming. Sony’s Playstation console has been powering hardcore gamers since 1994 and the current iteration, the Playstation 4, has sold over 7M units globally since it’s launch in late 2013 (source). And looking back at Sony’s last generation console, the Playstation 3, the company has sold over 80M units worldwide (source). The company has acquired a unique demographic of millennials. This established distribution network, combined with the upcoming Sony Gaming cloud service (currently in beta testing) makes for a closed loop ecosystem that can captivate and keep users engaged on a single platform.
But wait, doesn’t Amazon Fire also have a gaming angle? Amazon Fire is targeting casual gamers with lightweight android-based games. While I believe there is a market for these products, I also believe that there will always be a different market for more serious gamers — people who want richer experiences and story lines.
On a final note, I see a huge opportunity in using all these devices as a conduit for Sony’s internet TV service, slated to launch this fall. Sony already plans to take advantage of the 25M Playstation 3 consoles in the US, giving them an instant edge against competitors who still need to sell both new hardware and service.