Sony to buy cloud gaming service Gaikai for $380 million

By on July 2, 2012, 11:00 AM

Putting an end to weeks of speculation, Sony today announced it has entered into a definitive agreement to acquire cloud gaming company Gaikai, in an all-shares deal valued at approximately $380 million — below the $500 million quoted in rumors last week. It’s not yet clear how and when Gaikai’s technology will be implemented by Sony, but two obvious candidates are the firm’s TVs and PlayStation console.

For those unfamiliar, Gaikai allows subscribers to play graphically intensive games on weak hardware, much like OnLive does. The service processes games on remote servers and pumps the visuals to you. Since launching in February 2011, Gaikai has largely been used to stream demos so customers can actually try games for free at the point-of-sale before buying, but the platform could run full games as well.

The move could in theory allow PlayStation 3 hardware to run all sort of games and extend the console’s life. Sony is largely expected to announce a PS3 successor next year, however, so it is possible that a new streaming games service from Sony wouldn’t be revealed until then.

Besides giving gamers easy access to new titles, Gaikai’s technology could also allow for seamless backwards compatibility, which in turn could help reduce the costs and ease development of the next PlayStation console, and enable cross-platform multiplayer connectivity with the Vita.

Commenting on the purchase, Sony Computer Entertainment president Andrew House said, "By combining Gaikai's resources with SCE's extensive game platform knowledge and experience, SCE will provide users with unparalleled 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 will be interesting to see if Microsoft feels pressured enough to make a move for rival service OnLive.

User Comments: 7

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Guest said:

That was a great move sony, imagine streaming games to the PS3 tht look like pc or even PS4 games to the PS3 wow that would be sick!

Jos Jos said:

I imagine they will introduce some sort of games streaming service on the PlayStation, but I seriously doubt they'll let you play PlayStation 4 games on your older PlayStation 3 console.

Vrmithrax Vrmithrax, TechSpot Paladin, said:

Considering how backwards compatibility can often be a sticky point when companies are moving forward with new generations of hardware, this may be an incredibly clever move for Sony. Ensure backwards compatibility with a large library of titles, without having to place the limitations on the new platform that often accompany the code involved in supporting legacy software.

Plus, you gain a nice potential subscription-(and/or purchase-)based revenue stream, which you can apply even outside your consoles to cast a wider profit net. Will be interesting to see how Sony plays this.

Cueto_99 said:

Wowww... I'm shocked Sony still has money to buy out companies... they've been on a red financial strike lately...

yukka, TechSpot Paladin, said:

Bad news really in my opinion. Sony aren't my favorite company. The list of features people have been gagging for since the PS3 was released to make the online experience more user friendly has been ignored so no cross game chat amongst other things and then the mess with the PSN getting hacked. Not the best warm up for a reliable streaming service that works well. I expect it will be clunky. Hopefully they can prove me wrong.

This streaming gaming is ok for some things but the latency is an issue anyway isn't it. Is gaikei the company who were getting their technology into the TV sets, making deals with manufacturers so they could get really low level access to the display hardware? Wonder how that will fair or if games will be released with "Works best on Sony Bravia" shown during loading.

likedamaster said:

Sony is still making bad moves? smh. They are sinking, and no one to blame but themselves.

Moves like these are smart when YOU'RE NOT BLEEDING MONEY, not when you've gone from being a 400 billion net company to a 20 billion net titanic. Unfortunately, companies like this think they're too big to fail, but I digress. They could make a big turnaround, the biggest turnaround in history outside of Apple and be successful, and most important of all, profitable.

pams888 pams888 said:

They could make a big turnaround, the biggest turnaround in history outside of Apple and be successful, and most important of all, profitable. [link]

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