It is a service like Netflix that allows access to hundreds of games on Playstation 4, Playstation 5 and / or PC with Windows 10, for a monthly or annual paid subscription.
The games can be either downloaded to the hard drive or”streamed”i.e. only the image of the live game is sent to your console. For this second solution, you need a very good Internet connection, to see the action in a smooth and sharp way.
Some games can only be “streamed” like Playstation 1, 2 and 3 games.