Sony’s PS Now Isn't the Netflix of Cloud Gaming, It's the Blockbuster

Sony’s PS Now is an ambitious effort to become the “Netflix of gaming,” but it falls short in many ways.

Aug 6, 2014 at 10:17AM

Sony (NYSE:SNE) recently launched the beta of PlayStation Now, its cloud-streaming service for game rentals. PS Now streams PS1, PS2, and PS3 games onto PS3, PS4, PS Vita, PlayStation TV, and select BRAVIA televisions. Only PS3 games streamed to the PS4 are available during the beta period.

The service, which allows players to rent games for various amounts of time, has been nicknamed the "Netflix of gaming." Indeed, the idea is similar -- taking a product that was once physical, making it digital, and allowing customers to instantly access the title over the Internet. Unfortunately, when we dig deeper into PS Now's business model, we see that the service is a lot more like the Blockbuster, not Netflix, of cloud gaming.

Image

PS Now. Source: Sony.

Illogical pricing
Sony designed PS Now by mirroring the logic of physical movie rentals. A physical disc costs around $10-$20, while a physical rental at Blockbuster used to cost $2-$3 per day. That made sense prior to Netflix's arrival, since films could be watched in around two hours. Modern video games, on the other hand, often require 10-20 hours to complete.

Keeping that in mind, let's take a look at Sony's rental prices for some games compared to their physical counterparts, and the time necessary to complete them.

Game

PS Now rental rate

Cost of physical disc (used)

Cost of physical disc (new)

Hours to complete (average)

Killzone 3

$2.99 for 4 hours

$4.99

$18.99

10

Metal Gear Solid 4

$4.99 for 4 hours

$6.99

$17.60

18

Darksiders II

$14.99 for 30 days

$15.35

$19.50

31

Dead Rising II

$5.99 for 7 days

$7.69

$18.60

15

Catherine

$7.99 for 30 days

$13.82

$17.35

13.5

Sources: GameSpot, GameStop, Amazon, Game Lengths.

Sony's current rental prices simply don't offer a good enough deal compared to used physical copies of the games. In addition, physical discs can be played without an active Internet connection, yet PS Now requires a constant 5 MB/s connection to maintain lag-free gameplay. That massive bandwidth usage could be a major problem, considering the net neutrality and paid peering issues that Netflix has experienced with Comcast, AT&T, and Verizon.

More important, time-metered gaming simply isn't fun. Gamers don't want to be pressured to finish a game within a certain a time limit. That concept goes against the idea of completionist achievements that hardcore gamers love. It also removes the concept of physical game ownership while placing total control of the game in Sony's hands.

EA Access is a better idea
PS Now's high prices also compare poorly against Electronic Arts' (NASDAQ:EA) EA Access, a new subscription-based plan for Microsoft's Xbox One that offers "all you can play" games for $30 per year.

EA only offers a handful of older games, like Battlefield 4 and FIFA 14, but the membership also includes 10% discounts on EA digital games and early access to upcoming games like Dragon Age: Inquisition. Sony recently turned down EA Access for PlayStation Plus, stating that it wasn't a "good value" for PlayStation gamers. But from a consumer standpoint, if EA rolls out more older titles for EA Access, $30 per year is a much better value than paying Sony's steep à la carte rental rates for individual titles.

This doesn't mean that PS Now will never become a subscription-based service. Sony stated that the beta launch of PS Now was intended to get a better grasp of acceptable subscription rates. But judging from the high prices of à la carte rentals, Sony intends to aim a lot higher than EA Access' $30-per-year rate.

The big picture
When we look beyond Sony's awkward pricing tiers, we can see that PS Now is actually an ambitious attempt to dissolve its entire console gaming platform into the cloud.

A gamer in the near future will be able to simply turn on an Internet-connected TV, then instantly stream a video game like an interactive YouTube video. All the heavy graphics processing will be handled by cloud-based servers, meaning that bandwidth, not raw GPU power, will be the most important part of future gaming.

That's why Sony is so eager to roll out PS Now for BRAVIA TVs. If it can successfully put all of its PlayStation game libraries into the cloud, customers can play any of these games from any Sony platform without the original hardware. When sales of the PS4 eventually dry up in a few years, Sony can move its entire PS4 library into the cloud, making it accessible to any PS Now member.

The Foolish takeaway
Simply put, PS Now could eventually become the ultimate system of backwards compatibility, but the gaming market might not be ready for such a dramatic change. Unless Sony can offer an attractive flat subscription rate that is more like Netflix than Blockbuster, gamers won't pay to play a game for a few hours when they can own a used copy for roughly the same price.

 

Leo Sun has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers