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From play to Z: How Sony's Xperia Z3 phones could score via PS4 streaming

Sony wants to lure gamers to the Xperia Z3 line with its ability to remotely play PlayStation 4 games. And it'd be thrilled to finally see a smash-hit phone, period.

It's oddly fitting that Verizon Wireless was there to help Sony unveil the Xperia Z3v.

You can strap an Xperia Z3 or Z3v to a PlayStation 4 controller and start playing games. Sarah Tew / CBS Interactive

It was more than three years ago that Verizon took a chance on the Xperia Play, the first device to tout a connection with the popular PlayStation gaming console. It was a tenuous link, with the so-called "PlayStation Certified" mobile titles paling in comparison to actual console games. The smartphone was a massive flop, souring the relationship between Verizon and the phone maker then known as Sony Ericsson.

But on Thursday, Sony finally fulfilled the promise of a true smartphone gaming experience with the Xperia Z3v and the first demonstration of a smartphone playing a PlayStation 4 game through its Remote Play feature -- one that is exclusive to Sony's premium smartphones.

The Xperia Z3v (as well as its global flagship cousin, the Xperia Z3) represents the first Sony smartphone to be able to truly tap into the "One Sony" strategy of meshing the different strengths of the massive Japanese conglomerate. Sony's best smartphones have utilized camera and display technology from the company's other units to bolster its hardware chops, as well as access to Sony movies and music. With the Xperia Z3 phones, Sony will lean on gaming as it looks to stand out from a crowded field of smartphone players.

"There's no phone that comes close to the entire value proposition when it comes to the hardware, consumer experience, content and gaming," Sony Mobile US President Ravi Nookala said in an interview. "That will position us uniquely in the market compared to any brand."

The gaming link could prove to be the so-called "killer app," the feature that gets consumers seriously looking at Xperia Z smartphones. Sony said in August that it has sold 10 million PlayStation 4 units, a large base of gamers -- many with a strong sense of loyalty -- to potentially tap.

"It makes a difference," Carolina Milanesi, an analyst at Kantar World Panel.

While Sony is well known for its televisions, camera equipment, and especially for its PlayStation franchise, it flies under the radar when it comes to the US. AT&T was briefly a supporter of Sony's products two years ago, but dropped the vendor when sales failed to show up. Over the last year, T-Mobile has been the strongest supporter of Sony, picking up the Xperia Z1 and Xperia Z1S.

That changed Thursday.

Big Red equals big win

Verizon Wireless, which boasts the largest base of subscribers in the US, is a potential boon for Sony. That's why Sony was willing to create a customized version of the Xperia Z3 for Verizon, which plans to start selling the smartphone on Oct. 23 for $199 with a two-year contract.

The global Xperia Z3, meanwhile, has launched in Taiwan, Singapore, India and the UK.

"Verizon is always the one that vendors feel they need to make a splash in the US," Milanesi said. "It'll be interesting to see how much support Verizon puts behind it."

Verizon was intrigued by what Sony could offer to the carrier.

The Xperia Z3v comes with wireless charging, an extra feature over the Z3. Sarah Tew / CNET

"If we wanted to do something together with Sony, it had to be more than just a phone," Verizon marketing executive Jeff Dietel said in an interview. "No other (original equipment manufacturer) has that combination of hardware and content."

In addition to the Xperia Z3v, Sony will offer PlayStation 4 Dual-Shock controllers and a wireless charging pad, taking advantage of the wireless charging feature that marks the biggest difference with the original Xperia Z3. It already sells the Xperia Z2 tablet, and Verizon said it would knock off $200 if customers bought both the phone and tablet together.

T-Mobile has said it would sell the global flagship version, the Xperia Z3, but hasn't provided a launch date. That two carriers plan to sell Xperia Z smartphones so quickly after their debut bodes well for Sony, which has had a track record of releasing its best smartphones in the US months after they are released elsewhere.

Still struggling

While Sony took a positive step forward with its Verizon deal, the company's mobile devices unit continues to be a drag. The Japanese conglomerate last month warned that it would post a loss of 230 billion yen ($2.1 billion) in the fiscal year that ends March 31, 2015 largely because of its mobile division. The company plans to write off $1.67 billion to account for the diminished value of the business.

In response, Sony said it plans to narrow its focus on certain regions and on premium products, reducing its portfolio of more affordable smartphones. The strategy runs counter to players such as HTC, Motorola and LG, which are finding more success in the mass market.

Now playing: Watch this: Sony Xperia Z3v a Verizon-exclusive phone with most of...

Sony's already small market share in the global smartphone market has been on the decline. In the first half of the year, the company controlled 3.1 percent of the market, down from 3.8 percent in 2013 and 4.2 percent in 2012, according to IDC.

While the Remote Play feature helps, it won't be enough to suddenly spark a jump in market share, Milanesi said. She said she expects Sony to take on the responsibility of marketing the product, despite Verizon's support.

Sony's weakness in the mobile business is due its relatively late start. While Apple's iPhone franchise grew into a phenomenon and Samsung Electronics cemented its position as a smartphone leader, Sony was still fixing the business, first acquiring Ericsson's stake in the joint venture for $1.5 billion in 2011, then taking full control in early 2012.

After the takeover, Sony had promised to better utilize its different assets to propel the smartphone business. But before the Xperia Z3 arrived, Sony couldn't take full advantage of its gaming and media assets.

"Sony seemed to have all the ingredients, but the soufflé didn't come out the way it's supposed to," Milanesi said.

Catering to gamers

The ability to stream PlayStation 4 games over a common Wi-Fi network is something that Sony promised in early September when the Z3 was first announced. But Thursday represented the first time Sony was able to offer a working demonstration of the feature.

Sony has been working on the possibility of making PlayStation games playable on its smartphones for years, but Nookala said the watershed moment came with the PlayStation 4 launched and the Xperia Z line of smartphones started gaining attention around the world.

Now playing: Watch this: Trying out PS4 remote play on the Sony Xperia Z3v

It's the culmination of two years of promises that kicked off after Sony took full control of the mobile division, promising at the time that it would employ a "One Sony" approach to drive better integration within its various business units.

"From a value proposition standpoint, we thought it was critical to extend Remote Play to the best smartphone in the market," said John Koller, vice president of market at Sony's Computer Entertainment of America unit, which handles the PS4.

Remote Play was born out of Sony's desire to keep gamers playing even when they're not in front of the television, but initially it worked on only the PlayStation Vita portable gaming unit and the upcoming PlayStation TV streaming box. The explosion in the smartphone market convinced Sony that it needed to get Remote Play on mobile phones too, Koller said.

Vita sales "exploded" because of Remote Play, Koller said, adding that he expects the same thing to happen to the Xperia Z3 and Z3v.

"I think it's a natural behavior to look for ways to play PS4 games outside of the living room," Koller said.

Verizon plans to promote the family of Sony products at its store, including the Z2 tablet and related accessories. Sarah Tew/CNET