Sony (SONY -0.71%) made some major gaming-related announcements at E3 2015. The company revealed new exclusive titles for the PlayStation 4, expanded its streaming video service, and showcased the possibilities of virtual reality gaming. Let's discuss the three key points that investors should review.
1. Big exclusive games
Sony's PS4 leads Microsoft's (MSFT -1.27%) Xbox One in the eighth-generation console race, but both consoles only have a handful of compelling exclusive games. Among the top 10 best-selling PS4 games to date, only one title -- a remastered version of The Last of Us -- is a Sony exclusive.
That's why Sony's short gameplay demo of The Last Guardian, the long-awaited sequel to Ico and Shadow of the Colossus, came as a pleasant surprise. It has been a decade since the critically acclaimed Shadow of the Colossus was released on the PS2, and four years since the remastered edition was released for the PS3. Sony said the The Last Guardian would launch sometime next year.
Capcom's Street Fighter V, an exclusive release for the PS4 and PC, is expected to arrive in March 2016. Uncharted 4, Nathan Drake's latest adventure, will arrive next year as well. Killzone developer Guerrilla Games will also launch a new post-apocalyptic game called Horizon: Zero Dawn, and LittleBigPlanet developer Media Molecule is developing a virtual art and animation studio game called Dreams. To top it off, Sony announced that Square Enix would finally remake its 18-year-old fan favorite RPG, Final Fantasy VII, for the PS4.
2. Expanding PlayStation Vue
Sony also announced that it would expand its Internet TV service, PlayStation Vue, beyond its three launch cities (New York, Chicago, and Philadelphia) to San Francisco and Los Angeles. In a previous article, I discussed several problems with PS Vue. The biggest problem is the price, which ranges from $50 to $70 per month.
Source: Sony.
As a result, PS Vue is priced to compete against cable plans instead of streaming services such as Netflix (NFLX -9.09%) and Hulu Plus, which cost just $8 to $9 per month. But unlike most basic channel packages, PS Vue doesn't offer Disney's (DIS 0.16%) channels, which include ESPN, the Disney Channel, A&E Networks, and ABC.
To tackle this issue of high prices and missing channels, Sony announced that it would let customers subscribe to certain channels instead of buying the whole bundle. It's unclear how much these a la carte plans will cost, but this would be a unique alternative to basic cable bundles or streaming services.
3. The future of virtual reality
Sony first revealed Project Morpheus, its virtual reality headset, at last year's E3. Details have been scarce since then, except for reports that it would arrive in 2016 and cost "several hundred dollars."
At E3 this year, Guerrilla Studios revealed RIGS, a first-person shooter for Morpheus that lets players fight three-on-three battles in virtual arenas. Sony said it hopes its future VR games will offer gamers similar "social" experiences. By comparison, most VR experiences today are single-player affairs, due to technical limitations and a lack of compatible multiplayer titles.
Sony's assertion that VR will become more social is similar to the direction in which Facebook's (META -4.13%) rival headset, the Oculus Rift, is headed. Although Facebook and Oculus haven't yet unveiled any apps that straddle the two platforms, the company has strongly suggested people will visit their friends in virtual spaces in the near future. Sony and Facebook's strategy is notably different from Microsoft's approach with the HoloLens, which projects augmented reality objects (like Minecraft blocks) onto real surfaces.
Oculus Rift (L) and Project Morpheus (R). Source: Company websites.
Can Sony maintain its lead?
Sony delivered many impressive announcements at E3, but Microsoft arguably stole some of that thunder with a surprisingly solid keynote presentation. Microsoft not only revealed major exclusive titles including Halo 5, Rise of the Tomb Raider, and Gears 4, but it also announced backward compatibility for Xbox 360 titles and ran an impressive Minecraft demo for the HoloLens.
Sony's PS4 still has a comfortable sales lead over the Xbox One. However, Microsoft is clearly adopting aggressive tactics, and the upcoming launch of Windows 10 (which features Xbox One streaming and integration) and recent price cuts could help it narrow that gap.
