Thursday, 7 July 2011

IndustryGamers writes Sony Should Buy OnLive

The gaming industry is in a state of flux now, with the definition of what the “gaming industry” even is being expanded and changed. Despite the power that platform holders have and the money that can still be made by the AAA gaming industry, there are numerous disruptive technologies that threaten to tear down the established system that has run more-or-less unabated for the better part of three decades.

Many of these new gaming elements represent something “outside” of the interest of hardcore gamers – Zynga's Facebook offerings aren't going to replace Call of Duty and mobile games are typically “situational” and not a substitute for the full console game experience. Cloud-streaming games, however, offer a direct competitor to traditional game consoles and while there are several competitors in the field, the two main players are Gaikai and OnLive.

For the purposes of this article, I'm going to be concentrating on OnLive and not Gaikai or any other services. This is firstly because OnLive is currently the most established game streaming service, offering retail products and a large amount of software partnerships. Secondly, Gaikai is primarily used as a way to advertise games as demos on web-connected devices, is a better complement to retailer and enthusiast websites and not necessarily home consoles; OnLive is better configured right now for what Sony could use.

For those who don't know exactly what OnLive is, it's a cloud gaming service that lets players try and then buy their games. It works on PC and laptops, of course, but is also available using what they call a “MicroConsole” that can be hooked up to any TV. The service is expanding to certain HD TVs, Blu-ray players, smartphones and tablets and may come to set top boxes in the future. There's also a subscription option for unlimited access to certain titles and the service will be spreading to the U.K. and mainland Europe very soon.

There are a few ways that traditional hardware manufacturers would benefit. The gaming industry appears to be headed towards more of a service model anyway and away from hardware technology so focusing on what entertainment customers need is beneficial. It also has the potential to reduce costs in the long run – it's expensive to manufacture hardware units and a bit backwards thinking to necessitate the presence of some physical disc or card to play a game. Purchasing OnLive might give platform holders a leg up in the future.

I'm specifically making this argument for Sony, though some people might read this and ask “Well, why not Microsoft or Nintendo?” It's true that I think OnLive could potentially benefit any of the “Big Three.” Nintendo might be a bit more hesitant about everything OnLive has to offer; after all, Iwata-san has been very insistent that Nintendo software will not appear on non-Nintendo hardware, and that would preclude laptops, HDTVs, Blu-ray players, tablets and other devices OnLive can potentially run on. Microsoft does have an investment in numerous platforms (PCs, smartphones and home consoles) but Sony offers many more hardware devices than Microsoft and then there's the big one: PS Vita.

It only took a small amount of time after getting hands on with PS Vita to realize it could be the ultimate device for OnLive (or certainly the ultimate portable device for OnLive). It has all the buttons you could ever want for a core game: two analog sticks and a big, gorgeous screen to see all the action on. Besides, the PSP can already stream some PS3 games via Remote Play - OnLive support would be like the next step for the PS Vita and let full PS3 games play, perhaps without even having to remotely turn your PS3 on.

Part of the cloud computing potential for the PS Vita was shown off in the demo for Ruin. It's an action RPG where players can have the same persistent character saved to the cloud and played across the PS Vita and PS3. Imagine the possibility that could happen for any game, letting you make progress with whatever PS3 game you liked on the road without purchasing the game twice; Portal 2 also demonstrated the potential for cross platform play between PC and PS3.

The nice part about OnLive is that it can be a complement to existing retail offerings. If someone buys a new retail copy of the game for PS3, it can grant free access to the game on OnLive. There can still be options in place for users to download games as well, because internet outages do happen and people like the security of having a local copy. Plus, owning the service means that Sony can dictate when games release – maybe give retail releases a month or so breathing room after their retail release if they want to make good by their various partners. A subscription to consistent OnLive coverage could also be packaged with PlayStation Plus in some way, extending the reach of both services.

There's also a whole line-up of Sony products that could potentially use OnLive. Imagine a future where you can turn on a Bravia television and log in to the OnLive service and play Uncharted 3 from a hotel room. The same could go with a multitude of Sony devices like Blu-ray players and tablets that could perhaps project Sony Computer Entertainment into a world where PlayStation is more than just a physical piece of hardware hooked up to your television. Besides, Sony OnLive has a nice ring to it.

According to Panoptic Management Consultants analyst Asif Khan, who writes for IndustryGamers in his “Game Trader” column, a Sony buyout of OnLive is not very likely. OnLive is financially secure and they've aligned themselves with different telecom partners around the nation to be like an “anti-console” if you will. The IPOs of Zynga, net companies like Groupon and LinkedIn, and the potential IPO for Facebook all show that the market is placing great value on online companies, so OnLive could one day see even greater financial security. With many former Apple employees involved in the upper echelon of OnLive, they eventually want to make it big and be a competitor to PlayStation – they may make it there some day, given cloud gaming's potential.

I remarked to an OnLive rep at E3 that the PS Vita would be a great device for OnLive. He laughed and agreed adding, “I don't think Sony would like that very much.” But if they owned OnLive it would be a different story... it's nice to dream. [Editor's note: OnLive is talking to both Microsoft and Sony]

SOURCE: IndustryGamers.


  1. I don't think it's in Sony's interest to compete with itself. Nintendo has been clear that it prefers its independence, and Microsoft would only bungle it. A far better partner in my opinion would be Steam, which has a huge software catalog and no competing hardware product.

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