Uh oh! Time to dust off my newsman fedora! This morning, Sony announced plans to purchase on-demand game-streaming service Gaikai for about $380 million. That’s a whole lotta chedda’, and the implications for this one are pretty exciting. I mean, has Gaikai been building the backbone of the PlayStation 4 out in the open, underneath all of our noses? In my defense, I have a very large nose, but all you others suckers have no excuse. Allow me to back up a bit.
When the PlayStation 3 and Xbox 360 launched in the mid-naughts, they represented a striking leap forward for the industry due to the introduction of high-definition graphics. But I’m thinking of that scene in Super Troopers, near the beginning, where the druggies are in the car, screaming that they’d already pulled over; they can’t pull over any farther. HD can only get so high-def. But to really sell the new next generation, platform holders need a hook.
Cloud-based game-streaming is that hook. It will be the defining component of the new next generation, just as high-definition graphics defined the Xbox 360 and PlayStation 3.
And I say that not because it’s a solid technological innovation that developers can use to make their games better, even if that is actually true. And it’s not because it’s, potentially and arguably, consumer-friendly, in that it paves the way for gamers to get as much or as little of a game as they want. Because that is also pretty much true. No, see, it’s all about the Benjamins. Cloud gaming opens myriad new revenue streams for publishers, while also shutting down a number of problematic ones.
What I mean by that is cloud gaming creates a closed garden for publishers, and that means lots o’ control. Game publishers are, in fact, mostly psychotic when it comes to control, and who can blame them considering the price tag on games these days. In particular, this control has the potential to put a band-aid on the weeping scab that is the used-game market and perform an angioplasty for the aortic hemorrhage that is piracy.
And for a change, this digital strategy also just happens to be, potentially and arguably, consumer-friendly, in addition to being good for business. Namely, a pirate’s going to pirate, of course. However, there’s a large chunk of gamers who are simply broke and turn to piracy because it’s a gaming life of crime or no gaming life at all. For those in the broke-ass category, cloud gaming conceivably presents a way to pay less for games closer to their launch. How? Instant access to game rentals and demos for one, multi-game subscriptions for another. Plus, and you see this already with the PSN, deals! deals! deals!
A brief tangent into the used-game market: GameStop ought to be quaking at today’s announcement. Sure, Sony will publicly move to assuage the retailer, calling them an important player in the game-industry ecosystem. And for now, GameStop still is, due to the importance of in-store foot traffic and its effect on hardware sales and game discovery. But whatever. Amazon and online storefronts are ascendent, irreversibly so. It’s just as easy to move someone around a website as it is brick-and-mortar store. The game industry absolutely wants to rid itself of parasitic companies like GameStop, and could gaming coupled with the increasingly pervasive adoption of online storefronts allows it to do so.
(Incidentally, Big Gaming Press should be quaking, too, because who needs purchasing advice when, say, the first 15 minutes of a game can be instantly cued up, for free?)
Of course, cloud gaming’s been around for a couple of years at this point, and largely it’s been met with, at best, apathy, but more generally, pessimistic naysaying. To wager a guess, consumer confidence in companies like Gaikai and OnLive is low, especially as it pertains to the sale of games. For example, if Gaikai were to go bankrupt tomorrow, what assurance do I have that the game I purchased (or even rented) today will still be available? Zippo. The Sony-Gaikai deal resolves this issue, because even if Sony has been having a rough couple of years, the probability of it folding anytime soon is somewhere between Earth successfully fending off an alien invasion sans Will Smith and Michelle Bachmann saying something coherent, rational, and/or sane.
With consumers jumpy about the technology, third-party publishers have approached the services with only token interest. Sony’s presence changes that dynamic, too. OK, yes, Sony’s track record with getting third-parties onboard with yeah-maybe-a-little-gimmicky tech is spotty. Look no further than the PlayStation Move controller and 3D for support on that. But cloud gaming is different.
Mainly, people honest to god like the cloud. Novel, I know! Companies like Google, Apple, and Facebook have proven how useful it is for data to just be out there, in the ether, ready to be plucked, fondled, and replaced at a moment’s notice. On the train, in a bar, on the toilet. It’s right there. People like it! The same, of course, can not be said for motion controls and 3D, which are largely met with a DO NOT WANT reaction.
There are several other points here worth making, but this post’s already reached an unfortunate word count. But I can’t go without pointing out a detail most people won’t think much of: Terms for these types of acquisitions aren’t typically disclosed, so by trumpeting the $380 million price tag, Sony is trying to say something. I don’t care who you are, $380 million is To me, that price tag equates to Sony telegraphing its plans. Cloud gaming will be integral to the PlayStation experience going forward. And come to think of it, given Sony’s emphasis on cross-device, online-enabled functionality at CES this year, this one should have been obvious for a while now. And given that rumors are circulating that the next Xbox will through some means block used games, my money’s on Microsoft making a similar cloud-gaming announcement soon.
(Fun bit of trivia! Gaikai is run by David Perry, who prior to today’s deal is perhaps best known for creating the Earthworm Jim franchise.)