Hi there! My name is Janko Roettgers, and this is Lowpass. This week: The smart TV industry’s short-lived bet on cameras, and Netflix’s new games.

A camera adds nothing: Why smart TV cameras have fallen out of fashion

Earlier this month, the UK’s Comcast-owned pay TV operator Sky announced plans to pull the plug on one of its more ambitious hardware initiatives: Sky Live, a smart camera accessory for the company’s line of Sky Glass TVs, will stop working at the beginning of December.

“We’re proud of the ambition behind [Sky Live],” wrote a Sky representative in a forum post announcing the plans. “It’s given us valuable learnings that are helping to shape the future of our products. We have, however, made the difficult decision to discontinue it, in order to focus our investment on what matters most to customers.”

Launched in mid-2023, Sky Glass was supposed to transform smart TVs from passive media consumption devices into something a lot more social and interactive by bringing Zoom calls, workouts with body tracking, and Kinect-like motion games to the biggest screen in the house. Now all of that is coming to an end, with Sky bricking the camera and reimbursing consumers who bought it.

Sky’s discontinuation of the product comes as other TV makers seem to be rethinking the notion of cameras in the living room as well. LG’s Smart Cam, released in 2023, is out of stock at major retailers and appears to be discontinued, as is TCL’s smart TV camera. And while Samsung still ships such an external camera, it has stopped integrating cameras directly into its TVs.

All this made me wonder: Why have smart TV cameras fallen out of fashion so quickly? And what would it take to make cameras in the living room a success story? To get some answers, I caught up with Nex CEO David Lee, whose startup helped Sky with the Sky Live camera, and is now selling its own camera-equipped motion gaming device.

On its own, a camera adds nothing

Lee started Nex in 2017 to bring kid-friendly motion games to mobile devices, and got some early validation when Apple featured the startup on stage during an iPhone event in 2018. However, he quickly realized that smartphones simply weren’t the right form factor for games that used full-body tracking to let players shoot hoops, play whack-a-mole, or jump around with Peppa Pig. 

When he looked for ways to make the leap to TV, he teamed up with Sky in 2021. “That was a deep technical collaboration,” Lee says. “I spent a lot of time personally with them.” Sky licensed some of Nex’s motion games for its Sky Live camera, but the two companies also worked on optimizing these games for the chipsets Sky had selected for the camera and its Sky Glass smart TVs to minimize latency.

This experience made him realize how challenging it was to make computer vision-powered experiences work on smart TVs. With the covid-19 pandemic taking video chatting mainstream, a number of TV makers at the time were looking to cameras as the next big thing. However, few were willing to also put the necessary hardware horsepower behind those efforts to actually make those cameras a useful accessory.

“Adding a camera [alone] gives you nothing,” Lee says. “You need a real compute platform.”

Running camera-equipped apps and games requires powerful SOCs and GPUs, as well as more RAM and storage than many smart TVs ship with today — which is why some early TVs with built-in cameras left a lot to be desired, with limited app support being one of the biggest issues raised by consumers. Or as Lee puts it: “A camera app, hand gestures: That’s the best you can do?”

The reason most smart TVs are less powerful than mobile devices are the industry’s razor-thin margins. TV makers often sell their devices at cost, or even at a loss, and instead make money with ads and services. One example: Before getting acquired by Walmart last year, Vizio lost roughly $4.30 on average per TV it shipped in 2024.

There’s no business model for camera-equipped TVs

Some companies have seen success with more powerful standalone streaming boxes, and could feasibly use built-in cameras to differentiate their products from the competition. In fact, at one point, Apple considered adding a camera to its Apple TV streamer, according to Bloomberg’s Mark Gurman. Lee estimates that the addition of a camera and the necessary compute power to a streaming box would cost manufacturers an extra $30 to $40.