Rob Fahey makes sense of Sony's Gaikai buy. Streaming is only part of PlayStation's future, but it's going to be a vital one which leverages an enviable back catalogue across multiple devices. Question is, who's going to buy OnLive?
The Gaikai vision, which I suspect is shared at Sony, is of cloud gaming as a supplement to the gaming you do already. It's not going to replace a next-generation PlayStation packed with custom hardware and aimed at providing the ultimate console gaming experience from games distributed digitally or on Blu-Ray discs.
Sony, it's fair to say, isn't exactly in rude financial health right now. It just posted the worst financial results in its history, and its new boss, Kaz Hirai (he of PlayStation fame), faces the unenviable task of turning around a slow-moving company that's hemorrhaging cash. Yet today, the company finally confirmed what VG247 reported ahead of E3 - it's bought cloud gaming platform Gaikai, dropping $380 million on the firm and further swelling the bank account of its founder, Dave "He Made Earthworm Jim, By The Way" Perry.
What does that tell you? It tells you that Sony really, really wanted Gaikai - enough to splash out cash even when cash is causing such headaches. While the rest of us accept that cloud gaming is going to be a part of the medium's future at some point down the line, Sony wants to be involved as quickly as possible. Whatever the company has planned for the future of the PlayStation line-up, cloud gaming is obviously going to be a big part of the equation.
Gaikai's technology is pretty good. Unlike his rivals at OnLive, Perry has always been careful to downplay where cloud gaming is right now - he doesn't trumpet it as a way to replace consoles or gaming PCs, but rather as a way to deliver gaming in new ways and to new devices. Gaikai runs in a browser, without needing any dedicated hardware or software, and it's perfect for things like running fully functional game demos on websites, or logging in to an MMO from a tablet device that's not powerful enough to run the actual game client. You can play full games on it too, of course, but Gaikai shies away from the dubious claims of lag-free, crystal-clear HD perfection with which OnLive has become associated.
That probably tells you something about how Sony views cloud gaming. The Gaikai vision, which I suspect is shared at Sony, is of cloud gaming as a supplement to the gaming you do already. It's not going to replace a next-generation PlayStation packed with custom hardware and aimed at providing the ultimate console gaming experience from games distributed digitally or on Blu-Ray discs - instead, it's going to give you extra gaming options on a variety of different devices.
The bombastic rhetoric about cloud gaming being The Future (which it might be, but it's a future several console generations away) has always glossed over the problems with such a system, but those problems become a cold hard reality once a console platform holder buys up the cloud gaming platform. (That's always been the exit plan for both Gaikai and OnLive, I'm certain - neither of them really expected to survive as independent companies.) You talk a great game while you're trying to attract a bidder to come and buy your company, but reality settles in afterwards.
The reality is one we're all familiar with as gamers. Internet connections aren't reliable. Sometimes they lag for a few minutes while the people next door microwave their miserable ready-meal dinner. Sometimes you move into a flat that for no comprehensible reason can't get better than 512kbps ADSL. Sometimes your phone cable is severed by road works and doesn't get fixed for days. Sometimes your flatmate denies vehemently that he's downloading anything while your Netflix stream stutters and fails, and his secretly BitTorrented collection of goat porn grows ever larger. Sometimes you're simply not in a place that has a net connection at all. In all of these scenarios, streaming-based cloud gaming services will fail you utterly. If your entire gaming system relies on the cloud, then you don't get to play games unless your net connection is in perfect condition.
That's a reality which cloud gaming platforms tend to gloss over - if they address it at all, they use platitudes about how it's a minority of users who encounter such problems, or how net connections are getting better all the time. Both of those things are true, but they're also meaningless. If you're Sony or Microsoft, or any other publisher or platform holder, you want to know exact numbers. If 10% of your customers, for example, are going to hit regular, persistent problems with cloud gaming, then that means between 6-10 million people for whom your service is worthless - a nightmare scenario that makes Blizzard's Diablo 3 woes look like teatime in fairyland. Is either Sony or Microsoft about to ditch six to ten million customers because their net connection isn't up to scratch? No, they're not.
Sony wanted to stop anyone else from buying Gaikai, and you can be sure that as well as Samsung, Perry was talking to plenty of other firms Sony considers to be rivals. That begs the next question - now that the acquisition party has started, who's going to buy OnLive?
So that's what Sony won't do next. Dispense with any ideas of the PS4 being a cheap streaming box delivering next-gen experiences from a science fiction datacentre. A move like that would set the cat among the pigeons, but it would be an old, lame, declawed and likely blind cat, and the pigeons would just look bemused.
What Sony will do next is arguably even more interesting, though - albeit less earthshakingly revolutionary. The company has had a few faltering starts in recent years at the idea of extending the PlayStation brand across new devices. We've had a PlayStation branded Xperia mobile phone, which was unfortunately rubbish, and the brand also wiggled onto Sony's interesting (but also a bit rubbish) efforts at Android-powered tablet devices. Then there's PlayStation Mobile, formerly PlayStation Suite, a system for delivering PlayStation content onto mobile phones - presently just Sony phones, but a deal with HTC was announced at E3. The idea, ultimately, is to get PlayStation content and the PlayStation Network onto as many devices as possible.
Gaikai is a major piece of that puzzle. Back at E3, the company announced a partnership with Samsung to integrate Gaikai technology into every Samsung television. Expect Sony to do much the same, but even more of it, with Gaikai technology creeping into Sony televisions, phones, laptops, tablets and, of course, consoles.
What will that technology do, once it's there? It'll provide access to one of the most enviable back catalogues of entertainment software out there. Sony and its publishing partners are sitting on 15 years worth of extraordinary games - the back catalogues of PlayStation, PS2, PSP and PS3 effectively cover the entire period in which gaming became a part of mainstream culture and include countless games that have defined and redefined our medium. Some of those have been made available on PSP and PS3 as emulated titles, but Gaikai offers the potential to vastly speed up the process of making this software available, to serve the games to a wider variety of devices, and moreover, to experiment with new pricing ideas. How about access to the PS1 content library as part of your PlayStation Plus subscription? A couple of pounds a month for the whole Sony back catalogue streamed to your phone or tablet? Neither of those may come to pass, of course, but the point is that Gaikai gives Sony flexibility and reach it could only dream of before.
There are ways this can work for new games, too. I like the idea of streaming a game demo rather than downloading a few gigabytes for a 20-minute long sample - sure, the quality may not be quite as good as the final game, but even non-technical consumers are surprisingly savvy about stuff like that. We're all used to the idea that DVDs look better than YouTube, that Blu-Rays look better than DVDs; the concept that full games look better than streamed demos won't be a stretch for people. There could even be a streaming option for full games - I just wouldn't expect to see it replacing disc-based and download-based distribution any time in the next few years, at the very least.
That, I think, is how the Gaikai future will look. Not a replacement for your home console, but rather, more PlayStation in more places - an execution of a strategy that Sony's been struggling to get its head around for the best part of a decade. Of course, there's also one final reason why Sony bought Gaikai right now. It wanted to stop anyone else from doing it, and you can be sure that as well as Samsung, Gaikai was talking to plenty of other firms Sony considers to be rivals. That begs the next question - now that the acquisition party has started, who's going to buy OnLive?