Cloud Gaming: Sony To Leverage Its Hardware Diversity

At Tokyo Game Show, Sony has announced that it will introduce PS3 games via cloud streaming sometime in 2014. If you remember, Sony had purchased game streaming startup Gaikai (for $380M) which was founded by industry legend David Perry. Back then, I wrote about how Gaikai may change Sony Computer Entertainment forever, and it looks like the transformation will start next year, as Sony starts to roll out PlayStation games into the cloud. When it does that, other devices large (PS4) and small (PS VITA TV, XPERIA phones/tablets?) may access PlayStation 3 games over the cloud. This could be the first step towards a cloud-based gaming future.

PS3 games “for all”, one day?

At the moment, the details are scarce, and other than “it’s coming”, we don’t really know much about Sony’s plan. It is clear that Sony has been working hard to put that in place since Gaikai was acquired, but despite the excitement around the idea, executing such a plan remains very difficult because it may require an expensive infrastructure, and many of the key factors concerning potential network lag time may be outside of Sony’s control since the data packets will travel on the public Internet.

Yet, since PS3 is a fixed hardware platform, so there’s a possibility that continued cost-reduction and infrastructure optimizations would lead to good business model in the future (datacenters are all about compute density and power consumption). If it works according to plan, Sony may also be able to claim some level of “backwards compatibility” for PS4, although I have to say that game streaming cannot really currently be compared with local game play, but this will improve in due time.

Beyond the Sony realm

Interestingly, a successful cloud initiative would allow Sony to sell/rent PS3 games to an audience that was once out of reach: this effectively means that, one day, PS3 games could be available to just about everyone who can get their hands on a Gaikai client. PS4 and PS VITA TV are the ones we know are coming, but conceptually, XPERIA devices, PS3 and PSP consoles could be targets as well. Finally, and we hope that Sony considers it, every single device could be a thin-client: PCs, Macs, Android, iOS, Smart TVs… All of this has already by proven and it would be a huge mistake if Sony didn’t seize the opportunity to expand its cloud service to non-Sony devices one day.

Still a risky business, and one that is not trivial to copy

For Sony and for PlayStation game developers, a break in this business would indeed change things forever since it could create a significant new revenue stream, and prolong the life span of the games for as long as players are willing to pay for them and for as long as Sony can maintain the game server infrastructure. Of course, this is easier said than done, and we should keep in mind that no such business has been profitable at this point. Ask Onlive.

This is also a move that Microsoft may have a hard time to copy. At the moment, Xbox One can benefit from a theoretical cloud computing option, but we have yet to see what developers will do with it, and fundamentally, Sony could mimic that cloud compute strategy if it was to be successful. Because Microsoft doesn’t yet have a blooming device business (I guess that Nokia should count for something here), it may be difficult, or simply more risky and expensive, to build and launch the equivalent of Gaikai for Xbox – that is, unless you stream Xbox game to Windows PCs… That said, Microsoft could probably pull this together from a pure technology standpoint.

The idea is sound. It’s all about execution

In the end, Sony is reaping the benefits of having well executed on multiple front: at the moment, the PS4 enjoys consumer support and the XPERIA brand is making a comeback, thanks to improvements in design and overall user experience. PSP and PS Vita are somewhat successful and even if the PS VITA TV’s future is still uncertain, the ensemble gives Sony a good shot at making the Gakai initiative work. We knew this was coming, and the questions are now “when”, “which games” Gaikai will reach in 2014 along with “what business model”.

 

Hubert Nguyen
Categories: Featured, Gaming
Tags: PlayStation, Sony, TGS, TGS 2013