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

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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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45 comments

  • tehtimeisnow - July 4, 2012 1:15 a.m.

    no use sony cuz u sucks as a compeny almost as bad as nitedno and even with cloud gameing ps3 and psp vita will still fale cuz there no need for either of them now cuz we have the superier ipad and iphone
  • Thedigitalg - July 5, 2012 3:45 a.m.

    Seriously, I feel so bad for you. A little tip, if you used proper grammar and didn't deliberatly dumb down your writing, it might be less obvious you're a troll.
  • sternparez - July 3, 2012 3:44 a.m.

    clearly Sony haven't played FIFA on my connection
  • jmcgrotty - July 3, 2012 12:07 a.m.

    You just trying to piss me off? It must be the only reason to write this article. Cloud and/or streaming is absolute trash and is really unacceptable in any format. Only the dregs of society would use it. I know I am only 1 person, and it won't matter, but any sort of system that bases anything on a streaming or download model can count me out. I just will not do it. There is almost no chance I would buy a system at all that required Internet connection (which I am pretty sure the next gen will do). Now, onto one of my pet peeves: "You could be playing a game on your PS4. You might be streaming it, or your might be running it locally. You pause. You select ‘Switch to streaming device’. Your PS4 stops running the game, your PSN account fires up your streamed version (with your current save position secured by the cloud, obviously) and starts streaming it directly from a meaty, dedicated Gaikai server to your PSP, Vita, laptop or phone." People keep making that scenario, but NO ONE IS DOING IT! No one wants to do it, no one ever will do it. Why the fk do people keep presenting that as a scenario? NO person in their right mind is going to be playing a game on their console then pick up playing the exact same game on a handheld or any other device. Ditto for playing movies. It's NOT a feature that people want. The only situation that might ever make sense is the ability to transfer save data between a console and a portable for use on both, and that is still ridiculous. Please quit saying that this is something that might be possible, because while that might be true, there is no interest in doing it. Now you got me all pissed off. Thanks.
  • Hobogonigal - July 3, 2012 12:34 a.m.

    How on Earth do you know that Sony has no intentions of allowing you to stream console games to Vita. You don't know yet so whilst no-one else is doing it, the technology could be viable in a few years for Sony. You must remember that cloud gaming is only relatively new, it has only just really taken-off. Also, wireless internet is basically the norm nowadays and definitely will be in a few years when this this technology releases. I mean, what is it, about $100 for a wireless router at the moment (in Aus). The monthly download cap will be greatly increased in a few years, some companies offer infinite downloads as it is anyway, so that won't be a problem. Over here in Aus they are rebuilding the entire broadband network so that should increase speeds to viable levels over here. I don't think GamesRadar is trolling you mate, just thinking about when this technology may actually work; which is not right now, but when it is polished up down the line.
  • ParagonT - July 3, 2012 11:43 a.m.

    To be honest I think that anything that would require you to be online to access a game in itself sounds like a bad idea for me personally. Not to say that it doesn't have potential, I would love for it to work, but I will agree and say that people do tell us the potential of things, but never fully realizes that potential. Wishful thinking if you may. Anyways, cloud gaming seems like it could be the biggest breakthroughs, or the biggest problem maker in gaming. On one hand, it increases convenience and "supposedly" would decrease game prices, on another, it gives companies more control over what you actually own, which will always be used against your best wishes in mind. [I'm having connection problems with Windstream (Only ISP in the area) and can't stay connected for more than 20 minutes at a time, so online gaming is difficult for me right now. Which sort of affects my view right now as well.] I do however think that he needs to calm down a little. I understand some things just push those buttons, but this isn't something that anyone should be infuriated about. I am, for the record, against cloud gaming.
  • xx_CaPTiiN_SpAiiN_zz - July 3, 2012 2:13 a.m.

    this is EXACTLY how i feel about this. i think gamesradar should stop making these stupid predictions if they obviously a. wouldnt work and b. no one will bother trying to do them
  • bash street kid - July 4, 2012 12:24 a.m.

    Yes, people write articles just to piss you off. You are (of course) the centre of everyone's attentions: http://www.edge-online.com/features/what-does-sonys-gaikai-buy-mean-ps4 http://kotaku.com/5896996/the-next-playstation-is-called-orbis-sources-say-here-are-the-details
  • Gex4212 - July 2, 2012 7:31 p.m.

    The way I see it is...Sony will use its Cloud Streaming Service to provide a back catalogue for all its PSone and PS2 and and add to the PS+ plan. They will probably increase the current price of PS+ to about 50-70 a year. I dont think they will make it where you can purchase a game individually because it would conflict with their current PSN PSone and PS2 classics. With all the features you already get with PS+ plus the addition on unlimited classic games would be great
  • CUFCfan616 - July 2, 2012 3:19 p.m.

    Is there the danger that if the PS4 fails to ignite sales like the PSone and PS2 did (not so much the PS3), that Sony could go the way of Sega and pull out of consoles? Making a loss on every consoles produced when they first come out cannot be helping their accounts
  • BlueScorpion91 - July 2, 2012 1:30 p.m.

    I have a Xperia PLAY and it's great. A perfectly good gaming "platform", although not as good as iOS, but it's MASSIVELY better as a phone than the iPhone. Don't hate just for the sake.
  • Tjwoods18 - July 2, 2012 1:23 p.m.

    Why do this now when much of the best ps2 games have already been ported over in hd collections?
  • MetroidPrimeRib - July 2, 2012 11:20 a.m.

    Sony had enough money to buy Gaikai?
  • shawksta - July 2, 2012 10:59 a.m.

    Its great to see Sony wanting to expand on Cloud and I support them on this. Things like Demoes and PS1 and PS2 classics and such can really work out and other things they might think of. However, Sony needs to think throughly about this, because, when theres no internet connection, you have nothing, and there ARE PS3 owners who simply cant connect as easily as most of us, so things like full PS3 games wouldnt be a good idea. Otherwise im interested in seeing how this goes.
  • 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.

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