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Sony buys Gaikai: Why cloud gaming could save PlayStation by turning it into something very different

So, financially-troubled Sony has bought cloud-gaming network Gaikai. And for a fairly fat price-tag at that. Yes, this was predicted in our pre-E3 GamesRadar UK podcast special, but I’m not going to bang on about that. What’s important now is what this really means. I’ve weighed it all up, and I reckon that while it could be a game-changing fortune-turner for Sony, it might also mean a quite different PS4 than the one you were expecting. And maybe a very different future for PlayStation overall.

But that’s no bad thing. Trust me.

First up, let’s appraise the pros and cons of this deal in simple bullet-points. Because everything’s easier with bullet-points. In Sony’s favour, ownership of Gaikai and access to its games distribution network would: 

  • Theoretically allow high-end and left-field PC games to be played ‘on’ the PS3 right now
  • Potentially extend the PS3’s life  indefinitely if implemented on Sony’s current home hardware platform.  
  • Perhaps solve the PS3’s backwards compatibility problems overnight. Don’t want to put out a time-and-cost-intensive HD remake? Run a PS2 emulator through the Gaikai network and stream that stuff out.
  • Expand the PlayStation brand massively (and really, really quickly) if Sony were to bring a PS-branded gaming network to every online-enabled device

That said, potential negatives for Sony (and perhaps the gamer, depending on individual outlook) are that:

  • The speed of mainstream internet connections just isn’t up to de facto streamed gaming yet
  • After its recent $5.7 billion loss, a $380 million buy-out has got to have stung Sony a bit in the pocket, meaning that this deal really has to be worth it.
  • Microsoft could easily buy rival streaming service OnLive tomorrow with its pocket-change, creating a similar Xbox-branded service.
  • This whole thing could simply be a quite pricey damage limitation exercise

So then, interesting times incoming. My main concern right now comes more from a matter of Sony precedent than from any of the actual details of this deal. Given Sony’s current, far from un-hefty financial horrors, dropping $380 million on a developing technology which hasn’t yet found its feet or proven its place within the commercial landscape is kind of a scary prospect. Sony, let’s face it, is no stranger to costly all-eggs-in-one-basket decisions with this kind of stuff. 3D anyone? Yeah. And now is a time to be very frugal indeed in Sony Towers.

I also worry that the Gaikai buy might be more of a short-term damage-limitation exercise than a genuinely profitable advantage. Gaikai had plenty of interested parties sniffing around before this deal was finalised. It has been in the partnership business pretty much for as long as it has been around, delivering game content to a whole host of hardware and service companies, including a deal to stream games to Samsung TVs. There was every chance that a big rival was going to step up and use Gaikai to muscle in on Sony’s turf at any moment, so a defensive buy kind of made sense. That said though, streaming rival OnLive is still up for grabs, and Microsoft has very big pockets. And a much better track record with online networking. This may create no real advantage for Sony in the long-run, while still costing $380 million.

However, if Sony uses this technology smartly, it could give itself one hell of a strengthened position in the games market. But it will have to implement a less-is-more strategy, rather than Sony’s traditional approach of “This is the future, please love it because we have spent all our money on it”.

Remember the Xperia Play? Piss-poor as both a phone and a gaming device, but a very clear sign that Sony is trying (albeit currently failing) to expand the PlayStation brand beyond a simple box in the living room of the collective long-converted. With Gaikai, Sony could theoretically get its entire back-catalogue out to any online-enabled device in the world. Laptops. Phones. Tablets. PCs. MP3 players. Anything with a ‘net connection, a screen and a versatile user-interface could play everything from Parappa the Rapper to The Last Guardian (if it ever comes out). That's one hell of an instant jump in brand awareness and profit if it works, and it would put Sony in one hell of a hot position for the start of the next-gen console war.

And as for the next-gen console war...

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44 comments

  • Sjoeki - July 2, 2012 8:42 a.m.

    I play most of my games on the ps3 so I'm not a fanboy or anything but it sounds like sony is taking another big risk right now. I don't think people have to have played diablo 3 to know all about the error 37 problem, and to be honest I do think that Blizzard should have an idea about how many people would want to play there latest game, with having WoW and all. Ufc games (and that's just an example)are pretty much not worth trying online cause of the lag but also bigger games still keep you waiting a lot to be able to play a game online and even then you get kicked for no reason. And now for even the singleplayer games you'd have to be online? Don't know about that, also doesn't it mean it would end up that you rent everything instead of owning it? I can see why game companies would want that and I buy all my games but I still would like it to be my games and be able to play it at a friend or whatever.
  • Tjwoods18 - July 2, 2012 1:39 p.m.

    Well if you put it in terms of risk then microsoft has been hitting the stride very hard. How many companies have they pulled up in so far for thei 360 brand?
  • X-Killspree-X - July 2, 2012 9:17 a.m.

    This would be so sweet if they utilized this for Remote Play. Finally be able to play my PS3 games on my vita would be a HUGE plus, and great selling point to get the sales up for the device.
  • ultimatepunchrod - July 2, 2012 9:23 a.m.

    I just got an Xperia play. It may not be a great gaming device, but it is a perfectly good phone. Don't say shit just to give your sentences parallelism.
  • spankyj25 - July 2, 2012 10:10 a.m.

    I sincerely hope that M$ buys OnLive, now. I'm a huge fan on OnLive. I game on it almost daily. I can play my OnLive games from any online PC, my android phone, and I also own two OnLive consoles. I can picture having the service built right into my Microsoft console with the added ability to play Xbox and Xbox 360 games on all of my devices, as well. Cloud gaming isn't perfect, but it's pretty amazing when you consider the pricing versus traditional consoles. Being able to play full version games with "time limitation" demos is what first drew me to OnLive, and I would love to be able to check out the first 30 minutes of Mass Effect 5 without having to download or install anything.
  • xx_CaPTiiN_SpAiiN_zz - July 2, 2012 4:13 p.m.

    yeah that would be good especially as onlive revolutionised the cloud gaming market. if we get them on our side then microsoft will grow even better.
  • Mooshon - July 2, 2012 10:25 a.m.

    Incredible news really. Didn't see this happening for a while yet and it feels a bit early to be honest. TV/film streaming services have technically bedded in but game streaming is still slightly ropey. Bit laggy, not HD, and susceptible to server or connectivity issues. Not sure if I'm ready for game 'channels' yet either.
  • xx_CaPTiiN_SpAiiN_zz - July 2, 2012 10:28 a.m.

    the situation of sony doing ANYTHING good with software is nonexistant if you remember that hacking problem they had a while ago. oh how we xbox players laughed and laughed that day. good luck sony and i hope you dont fuck it up because the retarded half of gamers still buy your crapy software XD
  • HorriBliss - July 2, 2012 11:54 a.m.

    Jesus, all you do is BITCH about Sony any chance you get. Why don't you wise up a bit, and stop being a fanboy bitch? Microsoft has had 3 hacking problems that I know of, the longest of which was 2 weeks if I'm not wrong back in 2008, but has been hacked more times than Sony. Difference was people were used to the shit quality of Microsoft's gaming hardware by that point that they paid little attention to its software failings. Don't go thinking I'm a fanboy now, because Sony did fuck up with that hacking scandal but at least they gave free games and shit to their customers - Microsoft gave diddly-squat. Remember too that Sony went from best-selling console of all time with the PS2, to failing with the PS3's launch while simultaneously facing competition in each of its technology departments. The same thing could happen to Microsoft what with competition from Apple and, maybe, just maybe, that could be the start of a massive shift in momentum.
  • xx_CaPTiiN_SpAiiN_zz - July 2, 2012 4:10 p.m.

    because microsoft havent had problems and at least they give a good service. the ps3 is just for cheapskates who havent got a proper job and cant afford it. you are wrong because microsoft make games computers consoles phones and lots more sony dont make much. microsoft can easily come up with new ideas.
  • Gex4212 - July 2, 2012 7:25 p.m.

    lots more than Sony ? Sony is an Electronics conglomerate. They range from Phones to PCs. Televesions to Entertainment systems. They even have their own battery line for godsakes. Any electronic gadget you can think of Sony has a line of products for it. I'm not a fanboy but I just want to state the facts =X I love my 360 but I think it running on fumes the past few years
  • HorriBliss - July 3, 2012 4:32 a.m.

    I just told you about the hacking problems that Microsoft had so how does that classify as: "microsoft havent had problems"? Are you thick, an idiot, or just choose to ignore facts that don't agree with your mindset? PS3 is for "cheapskates who havent got a proper job", oh God, I'm not going to even bother with that ridiculous statement - if you honestly believe that statemenet then there's no point in even continuing this discussion, or else you're just a blind follower (I can't tell) And Sony have been making phones BEFORE Microsoft you donut. They also have a more diverse product ranget than Microsoft too; in fact, you've just proven how much of an idiot you are, I don't need to continue.
  • xx_CaPTiiN_SpAiiN_zz - July 3, 2012 6:08 a.m.

    THERE WE GO. you ignore my point because it completely destroys yours and weve accepted that people only buy the ps3 for its cheap online and a couple of exclusive games. microsoft make more money AND have sold more xboxes and that shows you that it speaks for itself. also ill repeat myself about microsoft not having problems because whatever hacks where experienced were nothing significant obviously epsicially compared to the ps3. get your facts straight before challenging me. i win this little conversation.
  • HorriBliss - July 3, 2012 1:15 p.m.

    What was your point? That Microsoft have a better service? Show me some objective, third-party research and I'll believe you - oh, what's that? You don't have any, oh yeah, that's because that was your OPINION, hence why I ignored it. Focus on facts during discussions, and try not to let your emotions run wild. I had a reply with refutations that would negate your argument, but I've no reason to continue a discussion with someone as immature as you: "i win this little conversation". Learn to act your age, mate. Enjoy your day for now.
  • c-c-c-combo breaker - July 3, 2012 3:31 p.m.

    Oh, I love this. When people fall hook, line and sinker for a little troll. 'in fact, you've just proven how much of an idiot you are, I don't need to continue.' >continues I couldn't resist.
  • HorriBliss - July 4, 2012 1:41 a.m.

    Bleh, what can you do? :')
  • Redix01 - July 3, 2012 9:51 p.m.

    i have had a ps1 broke, 2 ps2 both broke. Then i thought it would be a good idea to change sides since all Sony's stuff seemed to break. So I bought an Xbox it didn't break so i bought a 360. I had 3 got, which is one reason why 360 sold more. I got rid of the 3rd one after it got hacked and they used my credit card to buy shit that i didn't buy. I now have a ps3 i do miss playing gears but thats about it and it hasn't gave me any problems. And i am pretty sure the wii out sold both. And there is a real possibility that 360 will not be able to be sold much longer in the USA. Due to a big lawsuit between Motorola (aka Google owns them) and Microsoft breaking the law and using copyrighted stuff. Already happened in one country no more imports they are all made in China.
  • Tjwoods18 - July 2, 2012 noon

    Dude, get a freaking life all ready. I laugh at people like you who have to spend $60 a year on somthing that is so retarted as playing a video game online. So what? Do you really wish to hear little kids bitch on call of duty every day of every hour? No thank you, I will stick with a service that is free and will always be free. And for your information, the only reason hacker went after sony is because of their pursuit of Gehot. They can very will penetrate your precious 360 if they wanted to do so.
  • xx_CaPTiiN_SpAiiN_zz - July 2, 2012 4:12 p.m.

    haha so you insult playing video games on a video game website? grow up and get a job instead of listening to rap music.
  • Tjwoods18 - July 3, 2012 8:02 a.m.

    Read my words! I insult paying an ONLINE fee in order to play video game. It is an unneccessary expense fee on microsofts point, just to sqeeze additional revenue out of its consumers. Rap music is gay, so why in the hell would I listen to that? Try to know somebody before you make idiotic statments about them.

Showing 1-20 of 44 comments

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