Monday, July 2, 2012

Sony Buys Gaikai

Sony and Gaikai in love
Over the weekend, Sony did something very interesting: They bought cloud-based gaming platform Gaikai for $380 million.

A few people are going nuts over this purchase. Imagine: Being able to stream a PS3 game to your mobile phone, or play on your tablet, or play games directly from your TV with no console! The possibilities are endless! It all sounds very exciting, but with a few caveats.

We've said it before, but people do still like physical media. You may point at surge in MP3s being a counter-point, or the emergence of companies like Steam as well. An MP3 or app is a very small purchase, as far as dollars go, so it's low-risk. I also shouldn't have to reiterate why Steam works and other services don't, but you can read that if you like.

Nothing exists in a vacuum, not even technology. Granted, people's opinions on physical media are shifting, but there's no solid evidence that a console-buying public will willingly shift to a streaming or cloud-based model or pure digital distribution. The most wide-scale test, the PSPGo, failed miserably, although there were some other reasons behind that. (Lest we forget, the PSPGo didn't exist in a vacuum either.)

So no one is going 100% digital anytime soon, which means that Sony is going to have to go to a hybrid physical/digital format. They've done something similar with the PS3 to some degree by allowing games to be sold both digitally and physically, but not nearly as much as a Gaikai acquisition would seem to entail.

Here's how it could shake out: Sony sells two PS4s. One is the typical home console, sold for $399 or whatever, that takes physical media, digital downloads and Gaikai. The other PS4 is just a set-top box for $99. It only does Gaikai, and it needs a $10 monthly subscription.

Would that be successful? You bet. Would Sony go that route? It's debatable. They might be more inclined to try and force people who want to play a streaming-only PS4 to buy a Bravia TV or other Sony product. You would be able to understand the justification for going that route, but you can't say that would be a better idea than a cheaper set-top box.

Otherwise, they could just insert Gaikai functionality into the PS3 as it stands right now. That would be an interesting selling point: "You already have the next generation of system right in your hands!" I can't see them doing that, though. Where's the monetization of Gaikai? Where's the excitement? If Microsoft puts out the XBox 720, and Nintendo has the Wii U, how will Sony convince people to still buy PS3s? It would be a tough sell.

Either way, it's a very intriguing acquisition, and one that we'll have to keep our eyes on.

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