Sony Bets On Cloud Gaming with Gaikai Purchase, but Don’t Expect Drastic Changes

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Cloud gaming: the promise of playing games anywhere you can scare up high-speed Internet, the latest ones fired at you instantly and on demand — just like Netflix or Hulu video — and with all the visual trimmings. The ability to do all of that on nearly any device, be it an old, underpowered Mac, a modestly-accoutred netbook, a book-sized tablet or a souped-up Windows PC. In short, the best new games without visual compromises played through even mediocre hardware you already own, all for just the cost of the games themselves.

That’s the fantasy sell. Here’s the reality.

You’ll need an Internet connection of at least 3 Mbps — 5 Mbps or better is preferred — and you’ll generally prefer a wired connection to avoid Wi-Fi’s idiosyncrasies. You’ll need special client-side applets, like Java, to stream games through a browser (and if you’re running OS X, since Apple in its infinite wisdom isn’t providing Java anymore through Software Update, you’ll have to poke around to find the web page that still lets you pull it down manually). And if any part of your Internet connection sputters or hiccups, as Internet connections are still very much wont to do, that “visually perfect” feed will deteriorate into a blotchy, aesthetic-knifing morass.

In short, cloud gaming “mostly” works, but mostly’s still half a world away for type-hardcore personalities.

But yes, in a latency-free world, cloud gaming would all but eliminate the need for dedicated client-side hardware, replacing game consoles with simplistic “thin clients,” or simply piping content through a browser on a computer connected to a big screen TV. Centralized, lighting fast, ultra-simple, visually unmitigated video gaming — that’s the promise, anyway.

(MORE: OnLive Desktop Plus: Windows at Its Speedy Best — on Your iPad)

So Sony’s announcement that it’s snatching up Gaikai — one of two nameworthy players in the cloud gaming space, the other being OnLive (arguably the older, much bigger of the two) — for $380 million is significant. Not because it means cloud gaming has fully “arrived” or that we should expect the next PlayStation to be a cheap, tiny Roku-caliber box where all your content lives in the cloud, but because Sony’s throwing its weight behind this technology by way of a noteworthy player well ahead of its rivals.

What Just Happened

If you’ve been paying attention to cloud gaming in the U.S. since about 2010, chances are you think of OnLive when you hear those two words. OnLive was first to market, turning up its cloud gaming service in July 2010 — initially for $4.95 a month, then for free after it realized an access fee was probably a deal-breaker given the need to still pay full price for the games themselves.

It’s unclear at this point how many users OnLive has, but it’s gradually expanded its panoply of services, first with a micro-console that allows dedicated game streaming without the need for a computer, and later (in January 2012) with something called “OnLive Desktop,” a way to run Windows 7 and Microsoft Office on an iPad without performance penalties or Boot Camp-style partitioning (with support for alternative tablets and computers in the offing).

The irony of Sony’s Gaikai announcement? OnLive is already in Sony devices, as noticed just last week by Venturebeat.

Gaikai — a Japanese word that means “open ocean” if you trust Wikipedia — didn’t launch until February 2011, and it eschewed pieces like OnLive’s dedicated software client or micro-console device for a simple browser interface, allowing players to stream games like Dead Space 2 and Mass Effect 2 immediately at launch. By the end of 2011, it was peddling its wares through YouTube, and in April 2012, it added Facebook to its dossier of access portals. Even Samsung hopped onboard last month, announcing native Gaikai support in several of its upcoming smart TVs.

And now Sony’s thrown in, confirming that its gaming division, Sony Computer Entertainment, will use Gaikai to “establish a cloud service and expand its network business.” Note Sony didn’t say a “cloud gaming” service specifically, but a “cloud service,” the press release semantics probably heralding bigger and broader things than gaming alone, though SCE president Andrew House says his division’s lineup will initially focus on everything “from immersive core games with rich graphics to casual content.” Gaming out of the gate then, and whatever else — Movies? Music? Operating Systems? Applications? — later.

Also: House specifies that the new service will work “anywhere on a variety of internet-connected devices.” This isn’t just a PlayStation plug-in, in other words, though it’s almost certain we’ll see the service arrive on the PlayStation, too (whether for the current model or as an incentive to buy the next — or both — is anyone’s guess). Gaikai already transcends arbitrary platform limitations, and Sony’s basically signaling it won’t rein in the technology by making it platform-exclusive (think of the implications for the Samsung smart TV deal now). That goes hand in glove with Gaikai CEO Dave Perry’s (Earthworm Jim, MDK) pronouncement, where he says the deal will help Sony “dramatically improve the reach of exciting content.”

In the long game, reach is king, and that’s one of cloud computing’s pillars from a publishing standpoint (that, and its intrinsically piracy-proof architecture).

What It Means (Hint: Not the End of Console Gaming — Yet)

One thing Gaikai isn’t at this point, with or without Sony: a replacement for a dedicated console or computer. Not if you’re a serious gamer. Not yet.

The underlying technology — the Internet itself — remains the hangup, and any talk of brute-force speed-raising misses the vital point that it’s not the maximum speed that’s at issue, it’s keeping the minimum speed at a certain level in all circumstances short of a power outage (thus bringing it in line with old-school services like TV and radio). Anyone who’s watched their Internet connection ping-pong between rated speeds and somewhere down in the basement — less than 1Mbps — during peak usage times understands this.

Imagine the backlash if a hardcore-angled multimillions bestseller, say something in the Modern Warfare series, launched as cloud-only, and those beautiful photorealistic 1080p vistas intermittently turned into pixel-soup when the Internet hiccuped, or your kill-shots got loused up by latency-related lag — a total deal-breaker in first-person shooters where low latency rules all. Cloud computing has a huge challenge that even the brightest designers in the world won’t solve through compression and streaming algorithms alone, much less topological speed boosts to a gazillion Mbps. (For a more technical analysis of what’s at stake for hardcore gamers, see Eurogamer’s overview of the acquisition.)

So no, not a console replacement, but rather one of the “big three” throwing its weight behind cloud-based content consumption and probably adding it as an ingredient more than a central showpiece. By picking up Gaikai at this point, Sony’s signaling that it views cloud computing as significant enough to assimilate…if not outright showcase front and center. And if at some point down the road cloud gaming takes off, making it the access hub of whatever device — the next PlayStation or whatever comes after it, the PS Vita, various PlayStation-certified phones, etc. — it becomes just the next step in an ongoing process instead of a sudden, last-second maneuver.

In the meantime, my guess is we’ll see Gaikai’s technology appear as just another option in Sony’s service lineup, probably like Netflix or Hulu — again, think “ingredient” in a recipe as opposed to the main course. As noted earlier, this is a long game, one in which cloud computing may well eventually replace all of the local processing logistics in our computing devices.

MORE: Uh Oh: Microsoft Is Unhappy with OnLive Desktop

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