What Sony's Gaikai purchase means to PlayStation's cloud gaming future

What Sony’s Gaikai purchase means to PlayStation’s cloud gaming future

This $380 million acquisition gives Sony a foothold in streaming games.

Kyle Orland – Jul 2, 2012 11:00 am | 36

Using Gaikai is like being surrounded by hundreds of floating video screens threatening to crush you at any moment! Credit: Gaikai

The PlayStation of the future may be little more than a conduit to display and control games running on powerful remote servers. At least that’s one potential end game now that Sony Computer Entertainment has announced the $380 million acquisition of streaming gaming specialists Gaikai, which it will use to establish “a new cloud service.”

Established in 2008 by founders including Shiny Entertainment’s Dave Perry, Gaikai differs from other cloud gaming services like OnLive in a few key ways. For one, its service works directly in a Java-based Web browser, rather than through a separate downloadable program. This lets fully streamed games be embedded on a variety of websites. For another, Gaikai is primarily focused on providing free demo access to PC games from third-party publishers (including EA, Ubisoft, Warner Bros, and THQ), rather than selling players access to full games. This service makes money on advertisements and retail purchase referrals with partners like Walmart.

Sony and Gaikai have been rumored to be in discussions for months, with some reports jumping the gun in predicting an E3 announcement for the acquisition. And while Sony isn’t discussing details of what it’s going to do with Gaikai’s streaming technology, today’s announcement mentions plans to stream “content ranging from immersive core games with rich graphics to casual content anytime, anywhere on a variety of internet-connected devices.”

On the PS3 itself, a Gaikai-style service would make sense for providing instant access to game demos, without requiring multi-gigabyte downloads to space-limited hard drives. But the service’s real potential could be for getting PS3 content onto other devices without requiring expensive hardware. Imagine Gaikai-powered PS3 games being streamed to the controller-equipped Xperia Play phone, a cheap TV Microconsole that is much cheaper than a full PS3, or even directly to Sony Smart TVs. (Gaikai is already integrated into TVs from Sony competitors Samsung and LG, though those partnerships seem unlikely to last much longer now).

High-end gaming through the cloud still isn’t entirely indistinguishable from having a high-powered console in your living room, though. Even with a relatively high-end connection speed, there can be a noticeable loss in visual quality and controller lag as your input is sent to a data server hundreds of miles away. We noted such incidents when reviewing the OnLive Microconsole back in 2010. While some games will be “entirely playable” even on low-speed connections, cloud gaming may never provide the precise, frame-level response times required for fighting games. (Digital Foundry has a good in-depth round-up of the technical issues with playing games through the cloud now and in the future).

Still, having a cloud gaming option in place could be increasingly important to Sony going forward. It’s exceedingly unlikely the PlayStation 4 will be used for streaming games exclusively—Sony reportedly considered and rejected the idea of an online-only console for the next hardware generation. But if the PlayStation 4 has a new hardware architecture that makes local emulation of older PlayStation titles more difficult, as rumored, a cloud service could provide an easier method for running classic titles.

And while the PS4 hardware will be stuck at its initial hardware power for years after its release, cloud gaming servers can continually upgrade for better performance. NVIDIA is already focusing an entire product line on 3,000+ core GPUs optimized for cloud gaming. And remember, this high-end content could be streamed to practically any hardware that can handle a high-speed Internet connection and HD video.

Sony isn’t alone in seeing the importance of streaming games to its future. According to a purported product roadmap leaked earlier last month, Microsoft considers a cloud gaming microconsole to be a key part of its hardware strategy by 2015. The Xbox 360 maker was reportedly looking at acquiring Gaikai competitor OnLive at one point, according to the document. With that company valued at $1.8 billion, Sony’s $380 million purchase looks downright cheap.

All in all, while integrating Gaikai into the Sony family probably won’t revolutionize the PlayStation ecosystem in the short-term, it gives Sony an important foothold into cloud gaming. The timing may be perfect, as cloud gaming seems set to become a more integral part of how we access and play games going forward.