Sony and Gaikai – Sony’s Silver Lining
By Sam Kerr, Mindshare
Cloud gaming has been marked by many as the next big disruptive technology, which will herald a digital only future for the gaming industry. Earlier this month, Sony bought leading cloud gaming service Gaikai for $380 million. Founded in 2008, Gaikai has offered B2B services to publishers, allowing them to demo playable games to consumers from the cloud, meaning that relatively weak computers, tablets and smartphones can stream high-end gaming experiences over the Internet.Details
In light of Sony’s troubled finances, Gaikai’s acquisition initially seems a little expensive. However, the deal includes Gaikai’s streaming technology, access to their high profile partnerships with publishers and telecommunications providers and a large network of datacenters across the US and Europe. This potentially makes the deal the smartest move yet from Sony’s new CEO, Kaz Hirai, ex-president of Sony Computer Entertainment.
In addition to improving the PlayStation side of the business, Sony can also use this technology to help boost their ailing TV and Mobile divisions. Sony will most likely use Gaikai as a means to let Smart TVs, mobiles, laptops, tablets and consoles all stream content directly from PSN, finally allowing 15 years’ worth of software to become a prime selling point for everything Sony branded. And if Sony were to extend access to this service beyond their own devices, it could eventually provide Sony with the option of moving away from unprofitable hardware and towards more profitable ventures in software services.
It’s a clear sign that Sony has long term strategic aspirations for digital distribution, and fully intends to prepare itself for the gaming industry’s own iTunes moment, where convenience and accessibility to gaming content becomes paramount over visual quality for consumers. Implications
How this deal will affect game advertising is largely down to how Sony decides to monetize the opportunities that Gaikai’s technology brings, but Sony are keeping their cards very close to their chest. Here are some of the possible directions they could move towards.
As Gaikai’s technology currently allows for high-end games to be streamed through to browser-based interfaces as well as through rich media ad units, an additional avenue could open up for advertisers involving themselves in gaming content sponsorships. Potentially, brands over the coming years could share their existing PlayStation Home environments and content directly with consumers through any device capable of streaming video and not have to limit themselves to consumers who own a PS3.
As Gaikai’s recent partnership with Samsung has shown, it is likely that Sony will want to have this technology included with the next generation of Smart TVs and other screened devices, enabling advertisers within the consumer electronics, airlines, and hospitality industries the chance to license Sony’s impressive back catalogue of titles as an additional source of content for existing products and services, or as a sweetener for subscription based products. Summary
With access to Gaikai's technology and infrastructure, Sony can potentially stream new releases, demos and back catalogues of their games across their whole range of consumer electronics, whilst boosting the flagging performances of their mobile and TV divisions. Gaikai is a major piece to the puzzle that is digital distribution for Sony, which in the past has struggled with spreading its PlayStation success across its range of other devices, securing Sony a place in a digitally distributed future as a result. However, until Sony is more forthcoming with further details, we will have to wait before we can see the full impact of their integration of Gaikai technology.
(If you’d like to try Gaikai’s technology for yourself, visit their website
, pick a game and start playing)