The next generation of console gaming hasn't even officially begun yet and Sony's already put a large egg in its basket. Sony Computer Entertainment has confirmed that it has bought cloud gaming service Gaikai for a bucketload of money.
How much is a cloud gaming service worth? For Sony, Gaikai was worth a $380 million acquisition.
In the run-up to E3, it was rumored that Sony was planning to announce its buyout of Gaikai, but the deal never turned up during the company's rather dry E3 press conference.
According to Sony Computer Entertainment President and CEO Andrew House:
By combining Gaikai's resources including its technological strength and engineering talent with SCE's extensive game platform knowledge and experience, SCE will provide users with unparallelled cloud entertainment experiences.
"SCE will deliver a world-class cloud-streaming service that allows users to instantly enjoy a broad array of content ranging from immersive core games with rich graphics to casual content anytime, anywhere on a variety of internet-connected devices."
It remains unknown what Sony plans to do with its new cloud gaming service, and what will happen with Gaikai's recently announced partnerships to offer cloud gaming on Samsung and LG Smart TVs.
If we were to take a stab at predicting the future, we would surmise that Sony will push cloud gaming to its limits with its next home console, tentatively dubbed PlayStation 4/Orbis.
While cloud gaming has matured significantly over the last couple of years, it still remains a small portion of gaming, largely ignored in the shadows of console and PC gaming. One of the factors holding cloud gaming back is Internet speed. Because high definition games are being streamed in real-time to a display, the fluidness of a game depends on the user's internet connection speed and not their computer's processing power.
During a panel at E3, Gaikai CEO David Perry said that gamers don't care about the platform. They just care that there are
good great games to play. "We're moving the games to the gamer, instead of gamers moving between platforms."
Perry's stance meshes well with Sony's new "One" strategy, which aims to put as much of Sony's digital content on as many types of hardware as possible — smartphones, tablets, consoles, set-top boxes, HDTVs, PCs, etc.
From a business perspective, incorporating cloud gaming into its PlayStation console is a very smart move. With cloud gaming, Sony can effectively kill piracy dead. Discs can't be bootlegged and games can't be sold at used game stores such as GameStop because games are never actually stored on any local storage. Publishers would be very happy about that.
Last month, the Wall Street Journal reported that Sony was considering a "disc-free" console, but scrapped the idea because Internet connection speeds were too "inconsistent around the world" and that "because game files are large, customers in countries where Internet connections are relatively slow would be hobbled by a requirement to download games."
Rather than replace the disc with the download, streaming games could be yet another alternative to attract gamers away from the Xbox platform to Sony's PlayStation business. If we know gamers (and I think we do because most of us at DVICE are gamers), it's that they love having choices.