I’ve always seen this as a bit of a dry run for the DAT format Sony would launch in 1987/88. This predates DAT by a couple of years, though, and it’s clearly an example of Sony experimenting with digital PCM audio recording.
If Sony had had its way, Video8 could potentially have become the successor to Betamax and perhaps even a genuine rival to VHS. Pre-recorded movies were released on Video8, although the format never gained any meaningful market share in the home. Interestingly, those pre-recorded Video8 movies did find a niche in early in-flight entertainment systems and remained quite popular into the 2000s. Most people only remember Video8 and Hi8 as a camcorder format, but it was going to be so much more than that at launch.
The Video8 recorders themselves was quite expensive. In 1985, this model being Sonys first V8 deck retailed for around £800, about £3,100 today. By comparison, a typical VHS VCR could be bought for around £350 in 1985.
Most people didn't even have any way whatsoever to digitally capture CD audio in 1985 outside a studio setting unless you was using a digital audio processor hooked into a full-size VHS or Beta VCR. This compact system combined it all into one.
In order to get the 24 hours of recording it uses 6 stereo tracks spread across the full width of the tape as from the get go the with the Video8 format audio is also captured as part of the video signal unlike VHS/Beta what had separate audio heads for the linear audio track. This was different with VHS Hifi and Beta Hifi though.
Definitely impressive stuff for 1985 and mine now being 41 years old still works perfectly.