Outlook: Sony’s ‘PS Now’ Offers Classic PS3 Games for Online Rental

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On Tuesday at the Consumer Electronics Show in Las Vegas, Sony announced cumulative PlayStation 4 (or, PS4) sell-through of over 4.2 million units as of December 28. The PS4 launched in the U.S. and Canada on November 15, and in Europe, Australasia, and Latin America on November 29. Previously, on November 18, Sony announced that 1 million PS4 units sold-through in the console’s first day of release. On December 3, Sony (NYSE:SNE) announced that worldwide PS4 sell-through had surpassed 2.1 million units as of December 1.

The PS4 sell-through figure significantly exceeded our expectation of 3 – 3.3 million units. Thus far, PS4 sell-through is greater than that of its next-gen competitor, Microsoft’s Xbox One, and over twice the sales level of the predecessor PS3. Yesterday, Microsoft (NASDAQ:MSFT) announced Xbox One worldwide sell-through of over 3 million units before the end of 2013. We view the two announcements as a positive for GameStop, however, as the two next-gen launches in November are garnering a positive response from the gaming community.

Also on Tuesday, Sony announced PlayStation Now (or, PS Now), a streaming game service that leverages the cloud. PS Now will deliver older PS3 titles digitally to the PS4 and PS3 initially, with availability on the PS Vita to follow at a later date. PS Now will allow gamers to rent individual titles or choose a subscription if they want to play multiple games, among other perks. Sony will begin a beta test of PS Now on PS3 systems in certain regions of the U.S. at the end of January, with a full roll out expected in the summer.

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