Sony buys cloud-based streaming service Gaikai
|3rd July 2012||Matt Bailey|
It was rumoured for some time, but Sony Computer Entertainment (SCE) finally confirmed yesterday that it was buying Gaikai Inc, one of the leading companies working on cloud-based gaming. Gaikai, headed by industry veteran David Perry, has grown significantly in the last few years to see the company valued at US$380 million for this purchase.
Gaikai, like more well known rival OnLive, uses banks of servers to do the processing remotely so that even a fairly basic laptop or Smart TV could allow you to play the latest games instantly at nearly their maximum settings. Processing and video encoding is done with powerful machines at their premises before sending the images over the internet, and aiming to reduce latency as much as possible so that when you press a button it feels like the game is playing from the machine right in front of you.
A key difference between OnLive and Gaikai is that the former has been building itself up as a brand for the public, selling boxes in GAME that allow you to take its service on to your TV, and establishing itself as a direct rival to the console manufacturers. While Gaikai has also taken aim at the likes of Sony and Microsoft, it has instead focussed on providing its services to others, including companies looking to provide instant demos on their website. It's these services that SCE are looking to harness with a new cloud service that will likely integrate with the company's existing systems.
It's notable that it's SCE that has carried out the purchase rather than the wider Sony Corporation, clearly indicating that Gaikai will be integrated into the existing PlayStation-branded products, although this will likely include the companies' smartphones and tablets. Most immediately we're expecting to see some part of the service on the PS3 and maybe even the PS Vita, with instant demos looking likely considering Gaikai's existing experience in this area. Backwards compatibility for more PS2 games is another possibility. When it comes to PlayStation 4 expect the cloud service to be an integral part, with full games available to buy and stream instantly, but probably alongside more traditional digital and retail purchases.
While those plans have yet to be revealed, what's even less clear is what happens to Gaikai's existing business. While the company doesn't have any deals with Microsoft or Nintendo which would provide an immediate conflict of interest, it does have services locked up with various companies and currently has a focus on PC games. Sony may look to rework Gaikai as a PlayStation-only brand, shutting down existing efforts - but also risking ruining the successes the company has built up.
Another thing to watch out for is OnLive's reaction. With Sony's resources at Gaikai's disposal, OnLive have tough competition, but also a competition whose reach is likely to be limited by Sony's brand aligning. Will OnLive look to tie up a deal with Microsoft?