Wednesday, 30 May 2012

Sony to Buy OnLive or Gaikai

Rumors about Sony and cloud gaming partnerships are abound these final days before E3. The rumor that started this was about a partnership of Sony and either OnLive or Gaikai that Sony would announce at their pre-E3 press conference on June 4. Then news came out that Gaikai has sent out invitations to a presentation at E3, where the potential future of video games, game consoles and how we play will be unveiled. This led some to believe that Gaikai is the cloud gaming company which Sony will partner with.

Ross McGrath, Sony Computer Entertainment Europe (SCEE) PlayStation Plus content manager, also tweeted last week: "By the way, if you don't have a PS+ subscription, now is the time to get one. For real. Just get 3 months if you aren't sure. Trust me." This tweet could imply that cloud gaming is coming for PlayStation Plus (PS+) subscribers.

Now MCV has upped the rumor mill quite a notch. They write that Sony is about to acquire one of the two largest cloud gaming providers, either OnLive or Gaikai. Their source says that the deal is close to being signed.

They further write that the acquisition has implications for all parts of Sony’s business, both in the consumer tech and console divisions. Though Sony is quite far underway with the work on the PS4, they are very keen on bringing PlayStation content to non-console owners – a move finally made possible by this cloud gaming deal. There could be benefits for console users, too, with gaming content likely to be available when on the move and without the need for a direct connection to the console.

They also write that the Sony cloud gaming deal should make the fact clear that the digital gaming revolution is not a distant dream, as it's happening now. This should have obvious and colossal implications for games retail.

There are strong signs that either of the two largest cloud gaming services could strike the deal with Sony. OnLive has been unusually quiet in the first half of the year, which could point to something big coming. OnLive CEO Steve Perlman also has the habit of selling his start-ups to large corporations, though he is more connected to Sony's strongest console rival, Microsoft. He sold WebTV to Microsoft for over half a billion dollars and became a Microsoft division president. Microsoft’s acquisition of WebTV also brought with it the teams that created Microsoft’s TV platforms, including the hardware for Microsoft's Xbox 360. He also worked at Apple as a principal scientist and helped develop the first QuickTime video codec.

OnLive has positioned their service as a closed off console like platform in the gaming cloud. The Netflix like all-you-can-eat OnLive PlayPack games bundle could be a great supplement and a large boost for the ailing PS+ subscription service. Playing high-end PC games would also be great for console gamers.

OnLive has also great support for Sony mobile devices, as they have enabled support for the Xperia PLAY slide out gamepad controls for the OnLive App for Android and later also enabled support for the PS3 controller on the Sony Tablet S for the OnLive App for Android.

OnLive games play great on the Sony Xperia PLAY, but playing high-end PC games on the gorgeous PS Vita OLED screen with the better controls of the PS Vita would be nothing short of breathtaking and would certainly boost PS Vita's reputation and sales numbers.

OnLive is currently also the only cloud gaming service that offers a full gaming platform and is able to cope with day one demand from blockbuster games like Batman: Arkham CityOnLive CEO Steve Perlman also holds some important patents in the field of cloud gaming.

One interesting tidbit is also that OnLiveFans found out that EA Origin’s official twitter account had just begun following the official twitter account of OnLive. Once they pointed this out and contacted EA about it for comment, the @Origin_EA twitter account quickly unfollowed @OnLive. Could this just be a mistake, or could it mean something more? Could it be related to the Sony rumor? Perhaps it is OnLive after all, that Sony plans on acquiring, thus meaning that EA Origin will be bringing their games to the service.

At the start of this article I wrote news came out that Gaikai has sent out invitations to a presentation at E3, where the potential future of video games, game consoles and how we play will be unveiled. This led some to believe that Gaikai is the cloud gaming company which Sony will partner with. Of course this invitation by Gaikai and the 'coincidental' leak of it could also be a diversion, and their announcements at E3 will be of a different nature, like a partnership with Microsoft.

During a panel at CES earlier this year titled The State of the Games Industry: Consoles Are In Trouble, Nanea Reeves, chief product officer for Gaikai, said, "Not all of the current console makers will have one more generation. That will be the big news at E3." Does she know more than her words tell? Will Gaikai partner with Sony?

Gaikai has positioned themselves as an open white-label cloud gaming service, which would speak against an acquisition by Sony, as it's important for Gaikai to be neutral to be viable as a cloud gaming hosting service for other companies. But plans can change fast and Gaikai certainly needs a large and powerful ally with a name like Sony, if they want to grow fast.

Gaikai currently only supports game demoing, but they have plans for full games. They have demos of many high-end PC games from EA that OnLive doesn't have, as EA has not brought any games to OnLive though they are partnered. They also have a demo of The Witcher 2: Assassins of Kings Enhanced Edition, a blockbuster RPG game that is not on the PS3. Gaikai is also partnered with Facebook, YouTube, Walmart, Origin and many others. Sony could potentially benefit from these partnerships.

Getting streamed cloud games demos on the PS3 and PS Vita would certainly be great for gamers, as they could start gaming right away and wouldn't have to wait a long time until a game demo is downloaded. Gaikai cloud games demos could also be a great supplement and a large boost for the ailing PS+ subscription service and playing high-end PC games via Gaikai on the gorgeous PS Vita OLED screen with the better controls of the PS Vita would also be nothing short of breathtaking and would certainly boost PS Vita's reputation and sales numbers.

Gaikai also has plans in the mobile arena, as evidenced by their announcement that their cloud gaming network will be available on the world's first gaming tablet, the WikiPad. So their coming to the PS Vita would certainly fit in their mobile strategy.

This cloud gaming deal with Sony could come at a perfect time for Gaikai, as they have just recently partnered with NVIDIA and will upgrade their data centers with the new NVIDIA Geforce GRID cloud gaming technology. This deal could also be a strong sign for NVIDIA's cloud gaming efforts, as they have been cut out of next-gen consoles by AMD, and this deal with Sony could mean that at least on Sony's side there will be no next-gen console, hardware wise, but only a Sony cloud streaming box.

OnLiveFans has already got responses from the PR departments of the two cloud gaming rivals. OnLive gave their usual cut-and-dry, "No comment on this." Gaikai's response was more interesting, "There are always rumors about companies, and cloud companies, teaming up with console makers. Sorry we can't be of more help. If you hear of anything more, could you let us know?" This response could mean that Gaikai doesn't know anything about such a deal and it's indeed OnLive that will partner with Sony. But, of course it could also be a diversion tactic, a very simple one. But, many times it's better to keep it simple, so what will it be, truth or lie, or rumor?

Since both cloud gaming services run Windows in their data centers, if Sony were to acquire one of them and stream cloud games from their data centers, Sony PlayStation console hardware would for the first time in history run on a Microsoft operating system, though from a far-off data center, which is at least a little amusing. Of course Sony sells PCs and laptops with Windows, so I think they could get friends with it. Or would they switch to linux or develop their own data center operating system? Who would develop games for it? I think that much arrogance or stupidity even Sony doesn't possess in the wake of their financial troubles. Running Windows would certainly put smiles on the faces of game developers, who have experienced enough problems trying to fit their games onto the PS3 Cell architecture. With Microsoft fearing antitrust litigations, I don't think they would play funny games with Windows licensing for Sony's cloud gaming data centers.

Where does Microsoft fit into all this cloud gaming speculation. There has already been speculation that Microsoft will join forces with OnLive or with Gaikai. And what's with Nintendo? This year's E3 promises to be spectacular on big reveals, but depending on what really happens, it could just be depressing. Well, the wait will not be long.

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