The announcement came as something of a surprise, following the company’s decision to raise subscription costs by US$5 across the board in July.
In a blog post post written by Sony Interactive Entertainment deputy president John Kodera, the company announced the decision. Kodera wrote: “Unfortunately, the highly competitive Pay TV industry, with expensive content and network deals, has been slower to change than we expected. Because of this, we have decided to remain focused on our core gaming business.”
The news comes a week after an initial report from The Information that Sony was looking for a buyer for PlayStation Vue. With no buyer in sight and large players like WarnerMedia, Disney, Apple and NBCUniversal launching their own OTT offerings in the coming months, Sony has evidently decided that PlayStation Vue was an unsustainable product for the long-term.
Sony CEO Kenichiro Yoshida, who assumed the role in 2019, initially defended PlayStation Vue and argued that the service offered “valuable real-time data” about its users. The Financial Times reports that this position however changed following calls from activist investor Daniel Loeb, who called on Sony to streamline its business portfolio.
Since launching as an ambitious project in March 2015, Sony has consistently lost money on PlayStation Vue, with the platform peaking at around 500,000 subscribers paying between US$50-85 per month.
The service launched as one of the first main alternative competitors to pay-TV players. It offered a skinny bundle of channels, with the ability to add premium ones at a higher cost.
Speaking about what went wrong with PlayStation Vue, IHS Markit research analyst for media and entertainment, Max Signorelli, said: “Despite launching in 2015, in some cases years before its competition, Playstation Vue was unable to gain significant traction in the US TV streaming market. High package pricing combined with price increases over the last year dampened Sony’s subscriber uptake, especially compared to the likes of Google’s YouTube TV and Dish Network’s Sling TV.”
Sony isn’t entirely abandoning video on PlayStation though. Kodera added that “PlayStation fans can continue to access movie and TV content through the PlayStation Store on PS4 and via our partnerships with top entertainment apps.”
There are currently over 100 million PlayStation 4 consoles on the market, with the decision announced on the same day that the console has now outsold the original PlayStation and the Nintendo Wii.