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Sony Corporation Kills The PlayStation TV: What Went Wrong?

Sony recently stopped shipping the PlayStation TV in North America and Europe. The device, which initially cost around $100, was introduced in Japan in late 2013 and launched in North America and Europe the following year . Contrary to earlier reports , the PS TV will continue to be sold across Asia, where it might be used as a low-cost play for the Chinese gaming market .

for the PS Vita. Source: Sony.

Borderlands 2

PS4 Remote Play and PS Now were promising upgrades for the PS TV, but they weren't exclusive to the console. High-end Xperia smartphones and tablets also gained Remote Play support, while the PS Vita, PS3, PS4, Bravia TVs, and select Samsung TVs were all connected to PS Now. Therefore, owners of any of those devices didn't really need to buy a PS TV.

A setback for cloud gaming

The partial discontinuation of the PS TV is a major setback for Sony's cloud gaming efforts , since it was the cheapest way for a gamer to play cloud-based PS Now titles. Sony also pulled the plug on the PS TV before it added planned support for PS1, PS2, and PS4 games to PS Now.

The addition of those games could blur the lines between console generations and help transform the "PlayStation" brand into a cloud service. PS Now currently costs $100 per year for unlimited access to its core games, which could be a good deal considering that full-priced games can cost around $50 apiece.

Sony's PS Now. Source: Sony.

Sony's rival Microsoft has taken more subtle steps into cloud gaming. Instead of streaming entire games through a single service, the company is using cloud servers to stream certain assets of multiplayer games like Crackdown 3 . That move reduces the size of downloads and improves latency in online matches. In response to Sony's Remote Play, Microsoft enabled Xbox One players to stream their games to their Windows 10 devices. Microsoft is also reportedly working on a full cloud gaming platform codenamed "DeLorean," but we haven't heard much about the project since 2014 .

A smart move for Sony

Last quarter, Sony's Game and Network Services revenue rose 10.5% annually and accounted for 23% of its top line. Sony attributed that growth to higher PS4 hardware and software sales, which were partially offset by a decline in PS3 sales. On the bottom line, the unit's operating income improved 45.5% and accounted for 20% of Sony's operating profits.

Sony noted that impressive year-over-year bottom line growth was partially attributed to an 11.2 billion yen ($99 million) writedown related to the PS Vita and PS TV in the prior year quarter. Therefore, abandoning efforts tethered to the PS Vita and PS TV to let the PS4 flourish seems like a smart strategic move. However, the lack of a lower cost streaming device raises unanswered questions regarding the future of its cloud gaming efforts.

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The article Sony Corporation Kills The PlayStation TV: What Went Wrong? originally appeared on Fool.com.

Leo Sun owns shares of Amazon.com. The Motley Fool owns shares of and recommends Amazon.com. 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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