It's fair to say that most industry watchers could guess why Gaikai and OnLive have been marketing their streaming tech so aggressively in the past year.

No, it wasn't 'to make money'. It was to attract a buyer. The reason for this is simple. The economies of scale in terms of the R&D and operational cost of running such a service far outstrips the potential profits a relatively small-sized operation could leverage over a short amount of time.

This week's news that Sony has bought Gaikai for an impressive $380 million, then, only came as a slight surprise. That's despite the fact that the cloud gaming service in question is well known in the industry for offering up little more than a selection of game demos streamed through Facebook.

But, demos aren't why Sony has bought the company. Rather, it was for the technology that powers them. Buying Gaikai is the opening move in a war that could well turn current conceptions of device and format on their head.

Up stream

Forget all you've read about Gaikai tech being used as a 'replacement' for the PS4 - it's not going to happen. With internet connection speeds and coverage for the Gaikai service still variable (and with plenty of profit still to be made from selling hardware and software licenses), there's no way in hell Sony would merely put out a shell for running cloud-based games in 2013 or so.

While the games market as a whole is slowly, but surely, embracing a digital future, this doesn't necessarily mean a shift away from client-side processing will transpire in the foreseeable future.

Instead, the key thing to remember is that Sony isn't just PlayStation. The Japanese giant has many fingers in many different consumer electronics pies - from mobiles and televisions, to laptops and smart TVs.

The biggest benefit of streaming tech is that the processing requirement of the device needed to play a game is vastly lower than is normally required. That sounds like the perfect recipe for Sony to give its mobiles, tablets, and PS Vita a real edge over the competition.


As anyone who's streamed OnLive through his Android tablet or Xperia Play has found out, running games on a lower-resolution screen than a TV or monitor hides most of the artefacts that arise from image compression.

It also neatly gets around the age-old issue of mobile hardware being a few years behind larger technology (since the battle between power and heat / energy usage is more pronounced in the mobile field).

In a practical sense, the ability to stream games onto devices such as the Xperia S, Xperia Play, or PS Vita means that extra revisions to the hardware are not as important in keeping up to date with the fast-moving world of gaming.

It also opens the doors for truly connected multi-format gaming, where you start a game on console or Smart TV and pick up from exactly the same point, in exactly the same game, on your Vita or mobile.

This is an area that Sony seems to be wanting to explore more readily than its competitors, with first-party games like MotorStorm RC and WipEout 2048 already offering up inbuilt cross-platform functionality between PS3 and Vita.

With storage space for the Vita at a premium, it also wouldn't be too much of a surprise if Sony decides to initially use the Gaikai tech as a way of letting you stream demos to your device - thereby neatly sidestepping the memory card.


Anyone expecting streaming PlayStation games to pop up on Sony devices in any serious form any time soon will likely be disappointed, however. There's still a wide range of barriers and challenges to overcome before any streaming tech breaks into the mainstream - despite Sony's deep pockets.

In terms of challenges for Sony itself, Gaikai currently streams PC games only (just like OnLive). This will prove to be a major issue should Sony wish to stream titles designed for its hardware.

The other challenge is on the consumer side. Broadband coverage across the world may be increasing at a steady clip, but - to put it bluntly - the speed and reliability just aren't there right now for streamed services to play anything more than a bit part in the industry.

4G / LTE networks could potentially offer an alternative solution for streaming games in regions where broadband coverage is patchy, since devices compatible with 4G / LTE services can theoretically run at speeds that would make the current UK broadband network look sluggish. Sadly, the rollout of 4G / LTE services across the globe isn't exactly speedy at the moment (and, in the case of the UK, currently only in a limited trial stage).

But, Sony's acquisition of Gaikai is more about planning for the future than delivering the goods now. Having one of the major streaming companies and its (proven) technology in Sony's stable gives the Japanese titan more options and a better foundation for the seemingly inevitable convergence of devices.