Sony's (NYSE:SNE) latest PlayStation 4 accessory costs $30 and doesn't have anything to do with video games, but it does serve to highlight how the Japanese electronics giant's device is much more than a simple gaming machine. The PlayStation 4 Universal Media Remote gives PlayStation 4 owners a more familiar way to run their television experience through Sony's console.
Its release comes just days before the new Apple (NASDAQ:AAPL) TV makes its formal debut. Given the large price disparity, the two shouldn't be viewed as direct competitors, but they do offer increasingly similar functionality, and should compete in an indirect sense.
Consoles were the original set-top boxes
Sony's PlayStation 4 is first and foremost a device for playing video games, yet it offers many multimedia features. Its disc drive can work as a Blu-Ray player. It supports most of the popular Internet streaming services as well. As a smart TV solution, the PlayStation 4 is overkill, but with the new remote, it's perfectly capable of offering a cohesive living room experience.
Sony's video game consoles played a key role in establishing the market for streaming video, and remain important to its success. As recently as the first-quarter of 2014, Parks Associates found that in the U.S., video game consoles were the most commonly used devices for streaming Internet video, beating out dedicated set-top boxes by a margin of more than 3-to-1.
Sony is offering subscription services of its own
Since its debut, Sony has continued to evolve the PlayStation 4 platform, adding subscription services that should challenge those found on the new Apple TV.
The success of the new Apple TV may be defined as much by its subscription services as by its hardware. Apple is widely rumored to working on an Internet-based, paid-TV alternative: a bundle of channels delivered over the Internet to the Apple TV (and iOS devices) for around $30-$40 per month. The Apple TV will also support Apple Music, Apple's subscription-based music streaming service, allowing owners to more easily play streaming songs through their entertainment centers.
In both these cases, Sony has a compelling alternative to offer with its PlayStation 4. PlayStation Vue, its Internet-based TV service, costs about $50 per month. It streams a bundle of the most popular cable channels to PlayStation consoles and gives subscribers access to a cloud-based DVR. PlayStation Vue isn't available nationwide -- it's currently restricted to a handful of the largest U.S. cities -- but in terms of serving as Internet-based cable TV replacement, it's the best alternative to Apple's offering. Sony also offers PlayStation Music in partnership with Spotify. The service is essentially Spotify (Apple Music's top competitor) rebranded for Sony's platform.
$349 vs $149
But the PlayStation 4 and new Apple TV have major differences in two key areas: price and app selection.
At $149 for the base model, the new Apple TV is more expensive than its set-top box rivals, but it's cheap compared to a high-powered gaming console like the PlayStation 4. A household with two TVs could buy an Apple TV for each set and still spend less than they would buying a single PlayStation 4. The PlayStation 4 retails for $349 -- adding in the Universal Media Remote bumps the cost up to $379.
And ultimately, the Apple TV may be the better device for general purpose entertainment consumption and viewing. The Apple TV, unlike the PlayStation 4, will support an open app store. Apple has requirements, but Sony is far more proprietary in its platform philosophy: In the past, Sony has outright rejected apps that appear to compete with its own offerings. In time, it seems likely that the new Apple TV will offer more dedicated streaming apps than the PlayStation 4.
The Apple TV, with game device features, could steal some market share from Sony's video game console business. But Sony, in turn, is making the PlayStation 4 a more compelling entertainment device. To date, over 25 million PlayStation 4s have been sold worldwide and tens of millions more are likely to be sold in the next few years. A would-be set-top box buyer that has little or no interest in gaming isn't going spend $200 more for Sony's offering, but those who already own the console may have little interest in purchasing the Apple TV.
Sam Mattera has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple. 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.
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