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Sony (NYSE: SNE ) plans to launch a microconsole later this year. The PS Vita TV, which retails for about $95, will go on sale in Japan this November, ahead of the PlayStation 4's release.
With its ability to both play games and stream online content, the PS Vita TV should be a worthy competitor to Apple's (NASDAQ: AAPL ) set-top box. At the same time, the device is symbolic of a major shift taking place in the video game industry.
PS Vita TV should be a hit in Japan
So far, Sony has only announced the release date for Japan, though the device will almost certainly make it to other major markets in the near future. Buyers of the Vita TV will instantly gain access to a large library of games, including previously released Vita, PSP, and original PlayStation games.
The Vita and PSP are Sony's handheld video game consoles that compete with Nintendo's DS line. Both the PSP and Vita have lagged Nintendo's handhelds in terms of global sales, and by Sony's own admission, their handhelds have not lived up to expectations. Yet, the Vita has done fairly well in Japan, briefly outselling Nintendo's 3DS for a time.
With cramped cities and widespread reliance on public transportation, handheld gaming is huge in Japan. It's really no surprise then, that Sony will release the Vita TV in that market four months before the PlayStation 4.
More than a gaming device
But as its name implies, the Vita TV is as much of a set-top box as it is a video game console. Initially, it will launch with services aimed at the Japanese market (Tsutaya TV), as well as Hulu. When it makes its way to the US, Amazon Prime and Netflix seem like a lock, given that they're already available on Sony's PlayStation 3 console.
Of course, this could only be the beginning. There have been reports that Sony is currently in talks with content providers for its own Internet-based cable alternative. A Sony paid-TV service combined with a cheap Vita TV could be a potent combination.
iOS 7 and Apple's gaming efforts
And as Sony blends gaming with TV, Apple could be planning much the same. Apple's mobile operating system, iOS, is already a fairly strong gaming platform in its own right; still, its reliance on touch-based controls, and its restriction to Apple's mobile phones and tablets, means many continue to write it off.
That could change. iOS 7, set to be released later this month, will bring support for controllers to Apple's iOS devices. An iPhone or iPod Touch equipped with a controller could be a challenge for both Sony and Nintendo's handhelds, even in Japan. The country's biggest mobile phone carrier, Docomo, will soon start carrying the iPhone, and major Japanese developers like Square-Enix have shifted their focus to mobile phone development.
Microsoft's Xbox One is a smart TV
Microsoft (NASDAQ: MSFT ) is not a player in mobile gaming -- it sells no handheld gaming device, and its Windows Phone store lacks key apps like Instagram and Pinterest, let alone gaming titles. But its Xbox brand remains a major force in console gaming, and its next Xbox takes the concept of a set-top box to the next level.
At $500 its far more expensive than Sony's Vita TV or Apple TV, but Microsoft could have easily called its next console the Xbox TV. In addition to playing the latest games, the Xbox One also interfaces with owners' cable boxes, allowing users to control their TV with voice commands and hand gestures, as well as get personalized recommendations.
TV merging with gaming
Sony's Vita TV announcement underscores a trend taking place in the video game industry: The line between video game consoles and TVs is blurring. The Vita TV, with its ability to play games, could steal some sales from Apple's set-top box. At the same time, the Xbox One is as much of a TV interface enhancement as it is a gaming console.
The battle lines between all three companies are changing, and the both TV and video game markets are becoming increasingly important.
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