Sony acquired Gaikai. Now what?

On July 2 2012, Sony acquired Gaikai cloud gaming service. One month earlier, Gaikai announced partnership with Samsung, and were already partners with LG since January of the same year. Gaikai, as well as all other cloud-based gaming services like Onlive (which has now been announced to be supported by the new Android-based, 99$ home game console Ouya), are allowing almost any home or mobile device equipped of a good Internet connection and a browser to play high-quality HD video games. Controls are uploaded to the remote grid-rendering servers, and the audio/video stream is being returned back to the user's screen as a simple audio-video flux, all via a simple Internet connection. This technology was allowing TV manufacturers like Samsung, LG, Panasonic, Sharp, etc. to become serious competitors to the current video game hardware manufacturers like Sony, Micrcosoft and Nintendo almost instantly, as Gaikai were already offering a respectable catalog of AAA games from many major publishers like EA, Ubisoft, Capcom and Warner Bros.







Sony certainly feared the creation of a bunch of new competitors on the already-crowded video game hardware industry. If people started adopting the Gaikai service massively, chances are that those very same users would no more needed any -expensive- PlayStation console in their living rooms. Hence why they reacted by acquiring Gaikai.


Sony might seem to have reacted 7 months too late to the general public's eyes, being forced to respect Gaikai deals with LG and Samsung; but in the other hand, those deals are certainly not forcing Sony to supply them either with any new PlayStation titles nor any Sony exclusives. Chances are they first see this acquisition as a way to stop creation of more potentital competitors; but even better, they now have the power to transform those potential competitors in potential customers!


They will most probably continue to give minimum support to LG and Samsung, but they will most likely keep the cream and cherry for themselves by modifying and rebranding their own Gaikai service as a seperate official PlayStation-branded service that could be implemented as a paid upgrade to the current LG and Samsung Gaikai services, thus ensuring Sony a HUGE and instant userbase (Sony, Samsung and LG TVs) instead of starting from scratch. If Sony reacted too quick to buy back Gaikai, it is unlikely they would have succeeded to conclude such partnerships with those 2 competing TV manufacturers, assuming LG is the world's largest TV manufacturer and that they have partnership with Microsoft in South Korea regarding XBox360's 3D capabilities on LG TVs (for games like Avatar).

With the connected nature of the Vita (via either Wi-fi or 3G), gamers could stream games from anywhere, at anytime.Vita's graphical power can increase and evolve on demand because all the rendering process is done remotely. Remote rendering means the Vita's life cycle may last, in theory, much longer; until they decide that either the screen resolution, the Internet connection or the controls are absolete. Remote rendering technology would also allow Sony to provide full PlayStation 1, 2 and 3 compatibility to the Vita with less efforts, which is a major selling point. And with the streaming nature of the tech, you will also no more need to download big files, thus eliminating the need for huge memory cards and exhausting waiting times.


This investment is most probably the best move Sony did for the PlayStation brand since many years; they now have the technology, the patents and the server infrastructure to quickly launch a new widely-compatible software-based platform and keep their brands alive, adopted, and profitable. As said in Sony's press release about the Gaikai acquisition, "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.". That is Smart Business! Anyway, Sony won't totally leave the hardware market. They cannot; they will still need to manufacture official peripherals like controllers and online streaming players. This is ideal, and profitable on day one. Imagine if all you need to play Gaikai on Samsung, LG and Sony TVs in future is a Sony controller; they would sell tons of those controllers because the end-user doesn't have, anyway, to buy any expensive console to enjoy the PlayStation experience and ecosystem.


This is what leads me to expect that their next controller will be connected through USB and/or Wi-fi, and will be more innovative and more expensive than the ones available right now (DualShock3 and PlayStation Move). It can logically be a bit more expensive since users don't need to buy any powerful console (remember how the PlayStation3 was priced at launch!), and more budget means more room to innovation and quality. I am expecting Sony to re-brand their Gaikai-based service under the expected "PlayStation Orbis" brand, which will be available to multiple platforms, including the actual PlayStation3 and Vita through new (mandatory?) firmware upgrades. This way, Sony can continue to sell the PlayStation3 for many more years (respecting at least their 10-years lifecycle) and continue to support international gamers that don't yet have access to an high-speed Internet connection as well as more casual players, while still providing a powerful and highly-compatible next-generation platform (Orbis). This is probable, since Sony continued support for the PlayStation2.


"As of 2012, over 12 years after its initial release, new games continue to be developed and sold. The latest game is MLB 2K12, released in March 2012 in North America only;^[10] FIFA 13and PES 2013 are also due to be released for the system in September 2012." -Wikipedia.org


What is logic, is that Sony will release some kind of very cheap (99$?) micro-console like the Onlive micro-console, for people that do not yet own an Orbis-compatible TV or device. In this case, they will probably name that hardware something like the "PlayStation Orbis micro-console".