PlayStation Now Has Little Merit As A Standalone Service – Wedbush Morgan

As part of its most recent financial report, Wedbush Morgan discussed the overall possibility of success for Sony’s upcoming PlayStation Now – a Cloud-based streaming service that will allow one to (currently) stream PS3 games to their PS4. Analysts Michael Pachter, Nick McKay and Nick Citrin feel that as it stands, the service won’t have any substantial impact once it releases if it doesn’t have compelling content.

Wedbush also talks about server-based gaming services were the big thing ten years ago with the likes of OnLive but failed to ultimately succeed with consumers. While the analysts believe that compelling content will ultimately decide the success of PlayStation Now – even stating that there is a future for server-based gaming – they believe it unlikely that Sony will attract third party titles that are less than two years old.

Pachter first stated this on the Bonus Round episode for GT, emphasizing how the traditional publishing model will prove more lucrative for third party publishers than offering their titles on PS Now would – unless Sony had a significantly high subscription fee.

“We believe that publishers will seek 70% of PlayStation Now revenues, similar to the iTunes pricing model, and we think that publishers will have little interest in ‘renting’ a $20 game for anything less than $8 – 10. Thus, we think that the pricing of pay-as-you-go rental will be prohibitive, or in the alternative, the quality of the content available on a pay-as-you-go basis will be poor.

“While we think PlayStation Now has little merit as a standalone service, we think that it is destined to end up part of an expanded service offering. Sony’s purchase of Gaikai suggests to us that the company intends to integrate streaming games into its other entertainment service offerings, such as music subscriptions and pay-as-you-go movie video on demand. We think that Sony may succeed in bundling PlayStation Now with these other entertainment offerings in the future, but we remain pessimistic that the service can succeed as a standalone game service.”

Currently, PS Now is in beta testing and will go live this Summer. Do you agree with Wedbush’s predictions and analysis? Let us know in the comments.