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Sony to acquire Gaikai in $380m deal, paving the way for a ‘world-class cloud-streaming service’

Submitted by on Monday, 2 July 2012One Comment

Sony today announced that it entered an agreement on 30 June to acquire Gaikai. Sony, who is forking out approximately $380m for the company, is planning to use its cloud-streaming technology establish its own cloud gaming service.

Gaikai was established by industry veteran Dave Perry in 2008 to develop cloud-gaming technology. It has built an extensive network with data centres to cover dozens of countries. Gaikai recently partnered with Samsung to bring cloud gaming to TVs and has shown off impressive demos of Bulletstorm running in Google Chrome browsers.

Andrew House, president and Group CEO of SCE, has said the deal will allow Sony to provide “unparalleled cloud entertainment experiences”. He adds:

“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 was always assumed that Perry was building Gaikai to be sold, rather than to be a business in its own right. He has never shied away in the past from touting his technology to prospective buyers. In his statement Perry says:

“We’re honored to be able to help SCE rapidly harness the power of the interactive cloud and to continue to grow their ecosystem, to empower developers with new capabilities, to dramatically improve the reach of exciting content and to bring breathtaking new experiences to users worldwide.”

The acquisition was expected to be announced at E3, but that never materialised. The rumours were played down by Perry afterwards, but he told Eurogamer that it was inevitable that consoles would adopt cloud-based gaming.

“I honestly can’t think of a future for the console companies that don’t include cloud gaming at some point,” he added. “They can hold out as long as they want to, but at some point, you don’t want to be the console that can’t do this. To some extent, I expect all three of them will have this.”

It is unlikely that Sony will be abandoning HHDs and Blu-ray drives for the dream of cloud gaming any time soon. The technology does have limitations, most notably the fact that large sections of Sony’s market still lack a decent internet connection, or any at all. Also, even those that do have high-speed fibre broadband still notice lag and a drop in picture quality.

Cloud gaming can however simplify the process of bringing the PlayStation back  catalogue to mutliple devices, ranging from PS Vita and PS3 to smartphones and tablets. There is also potential for having instant streaming of demos in the future.