PlayStation Now: The Beginning of the End for Console Gaming?

Sony’s new Netflix-style streaming service offers completely cloud-based gaming.

Feb 9, 2014 at 5:00PM

With the new PlayStation Now, Sony (NYSE:SNE) is first out of the gate with a cloud-based streaming game service that changes the rules of the game. With a distribution model very similar to that of Netflix (NASDAQ:NFLX), PS Now could even herald the end of game-console hardware as we know it.

On the scene at this year's Consumer Electronics Show in Las Vegas, Foolish tech analyst Evan Niu got an up-close look at the new service. He joins Rex Moore to tell the story of what could become the "Netflix of gaming."

A full transcript follows the video.

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Rex Moore: Evan, you saw some interesting stuff with Sony. Tell me about that.

Evan Niu: Sony announced the PlayStation Now. It's a new game streaming service that looks pretty interesting. Sony bought a company called Gaikai back in 2012 -- a streaming company -- and now they're finally going to launch the service. It allows you to stream PlayStation 3 games to TVs, smartphones, and tablets, and it's all based on the cloud.

It's a pretty impressive performance. For a game that's really graphically intensive -- 3D stuff -- streaming completely from the cloud and being able to control it, it was pretty impressive. You would expect some performance lags, and in some cases if you don't have a good connection you might see some, but if you have a pretty solid connection, it's actually a pretty good experience.

They're going to be testing out different pricing models, like renting versus subscription, so they're still going to try to figure it out there. This isn't something that Microsoft (NASDAQ:MSFT) (with Xbox) has done yet, in exactly this way, so I think it's going to put some heat there.

Moore: As the performance does get better -- and we know it will, over time, on things like this -- are we looking at the demise of console gaming?

Niu: I wouldn't go that far, but it definitely removes the need for having the actual hardware console, so that definitely is a long-term possibility because eventually, if they can get this performance good enough, you could do away with the hardware -- keep all the hardware in the cloud and virtualize everything -- just stream it.

Then if you could build this new model on it, how to monetize it, if you can generate recurring revenues as a subscription ... it's kind of like the Netflix of gaming.

Moore: Yes, that's true. Okay.

Evan Niu, CFA has no position in any stocks mentioned. Rex Moore owns shares of Microsoft. The Motley Fool recommends Netflix. The Motley Fool owns shares of Microsoft and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

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Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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