@michaelmikado: That's the problem. Psnow really isn't a gamepass competitor. Gamepass appeals to Xbox and pc gamers alike...there's been very little reason for PS4 owners to subscribe to psnow, which shows in the subscription rate. By cutting the price, offering downloads and limited amounts of older 1st party games, Sony are attempting to improve that attachment rate in line with gamepass numbers.
Ms don't release figures about gamepass, but we know that more than 3 million players played gears 5 on its first weekend, and that physical sales were poor...so it's safe to say it's doing much better than psnow.
The problem for Sony is that they already had a streaming service, but failed to capitalise on the head start. Playing games at 720p just doesn't cut it, and even a price cut and a resolution bump won't help the service unless they start including 1st party games on day 1...which they won't do.
Xcloud will launch with 4k gaming, as will stadia. It'll have 1st party games day 1, as will stadia....and it's easy enough for ms to match psnow's price, or make a package including gamepass, Xcloud and live.
The ball was in Sony's court, but they've been down to Matchpoint since psnow's inception.
As someone who has subscribed to PSnow for years now even at its previous price point I can tell you it is untrue that it has no value for PS4 owners. In fact the bulk of the subscribers are PS4 users.
The reason it hold value is simple. If you have kids, they have almost every Lego game and Disney game from the PS3 and current generation. Kids which these games appeal to are far less sensitive to latency and visual quality than even the average gamer. At $100 a year I never had to buy a single game for the kids while also being able to play a couple games for myself. It's a MASSIVE bargain for a family. GamePass as far as the number of subscribers go is a whole different animal. Its is heavily subsidized by Microsoft solely for the purpose of offering value and being a loss leader. PSNow hasn't been a loss leader because it hasn't needed to. It stabilized its business model and worked to reduce costs to offer better pricing in the future to meet competition.
I think you aren't understanding PSnow or the business model or the back end of the streaming business at all.
PSNow was built to stream PS3 games which max out at 720p. It never made sense to go above that. Further the PS4 and PC app both use hardware acceleration to upscale a 720P stream if/when possible. As far as the PS4 game Sony took the logical step of allowing it to be downloaded. With streaming games, the higher resolution and assets, the more you costs per hour of use. By keeping the resolution low it keeps their costs and thus their pricing low. Further allowing downloads reduces their costs even more. This also gives them a marketing opportunity. If you want the best experience you need to buy a PS4 console which is their bread and butter. You can play without it but you will not get the best experience. It essentially acts as an advertising tool.
This has been the problem with all these services.... finding a business model which actually is profitable and PSNow is the only one actively working and in business because they found a model. Keep streaming costs down by offering a download alternative at max performance.