Sony to buy cloud gaming service Gaikai for $380 million

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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.

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