PlayStation Now's $20 Monthly Fee Could Be A 'Bargain'

Sony Corp (ADR) SNE will charge $20 per month for an all-you-can-eat version of its streaming game service, PlayStation Now. The service (which will also be offered at $45 for a three-month commitment) features more than 100 PlayStation 3 games, including "Uncharted: Drake's Fortune," "Bioshock Infinite" and "God of War: Ascension." Sony previously revealed that "The Last of Us" would be offered as well. This could be an intriguing lineup for those who never owned a PlayStation 3, especially since you won't need a game console to use the service. (PlayStation Now's subscription service will launch on PS4 and slowly spread to other platforms, including select TVs from Sony and Samsung.) Still, $20 is a lot for a service that doesn't offer the latest video games. Will consumers be willing to pay? "It is pretty expensive for the games offered, but we shall see if consumers embrace it," Wedbush analyst Michael Pachter told Benzinga. "The technology is fine, and I am sure it will work flawlessly. Over time, they are going to add some games, so it may end up being a bargain."

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Self-Inflicted Wounds

While the game lineup may get better with time, Enderle Group principal analyst Rob Enderle thinks Sony is holding back to protect its primary game console. "I think Sony is intentionally crippling the service so they don't cannibalize PlayStation 4," said Enderle. "People tend to pick up on that." Enderle fears that could tip off the competition and allow another player to take center stage. He said that Valve, Microsoft Corporation MSFT or another company could take Sony's technological accomplishment (bringing high-end streamed games to the masses) and build a better service with new games that people are eager to play. At this time, PlayStation Now only features older games -- including those that PS Plus subscribers were once able to download for free. "By you doing it, you validate the model, so it makes your customers aware that this stuff is real," Enderle explained. He compared it to the IBM Peanut, which validated the low-cost consumer PC concept. Thus, if Sony fails to turn PlayStation Now into a compelling service, others may copy the format and take over the market. Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.