Chasing Clouds

The PS3. Or a bit of it, anyway.

Today saw Sony purchase the cloud gaming service Gaikai for $380 million. But what exactly does this mean for Sony and the PS4, and in a digital age where most of the services are some way from being perfect, can the future really be served up on a cloud service for the benefit of consumers?

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Sony’s acquisition of the cloud gaming service Gaikai for a cool $380 million raises a lot more questions about the future of the PlayStation service.

Whilst it may not be arriving until 2013/2014, the PS4 as a machine is taking shape. Sony have insisted that their new console will not drop the physical media that people are still very happy to buy, but purchasing Gaikai gives them some serious advantages and a little more futureproofing than its rivals.

For a start, let’s talk about the advantages of the cloud service.

Cloud Gaming is taking shape – the success of OnLive has demonstrated that there is a demand for a reliable streaming service that has the latest blockbusters. It is not yet perfect, but it is better than most would hope to see at this stage in its early life – with the right connection speeds, there is comparably little difference between running it on your own hardware and running it on a cloud service. That this is possible does ensure that the future, if it were ever to go digital-only, would mean the hardware leaps would be a lot cheaper and a lot less complicated.

Also, in a world where we are losing backwards compatibility, the cloud offers another unique benefit – that they can set up servers and a service that would be capable of delivering games of the past, running in their native resolutions and on the correct hardware specifications, without having to create software emulation or building in hardware emulation to compensate. This is expensive for any machine – and it is such a complicated and awkward process even Microsoft gave up some time ago trying to guarantee backwards compatibility for their older games. It means games can never really “die”, they can exist for years and never be out of reach or hard to find. This means classics that weren’t such successes to begin with can be sold cheaply and soundly, without having to part with the often extortionate prices that some games command nowadays.

It also means Sony have their options wide open – and are taking a digital service more seriously. It is a bold step that for Sony brings with it patents and infrastructure, and whilst the technology may still need some work (Gaikai is some way behind OnLive in this regard) it gives Sony a stable grounding to work from, without worrying about treading on too many toes. Their past dealings with the DualShock technology denote why this is such an important thing for them – they need something already tried and tested, and to buy into it early like Microsoft did with the rumble feedback lawsuit. They settled, rather than fought their corner like Sony, and that cost Sony dearly. It’s a huge deal that Gaikai comes with its own tried and tested patents and guarantees. It is security.

But security comes at a cost.

Sony aren’t exactly flush with cash right now, and to spend $380 million on a technology that may still require a few years to become widely accepted when you have made losses for the past five years is a bold and risky step to take. Sony are ones who DO take bold steps, but rarely have they worked out in their favour – their multiple media format failings, coupled with the PSN hacking fiasco and their huge overspend trying to ensure Blu-Ray beat HD-DVD whilst it still remains a minority share of the market space demonstrate that Sony are brave, but perhaps a little foolish with it. Acquiring Gaikai is another bold step that they didn’t necessarily have to undertake at this exact moment in time – and it is extremely hard to say whether it will be a move that works for them in the long run.

Another problem is that digital media comes at the cost of consumers not having a “physical copy”. Now for some this is quite simple, as downloads mean you still “own” a copy as you pay for it, and can in most cases still play offline in most games should you choose to do so. But Cloud Gaming requires the internet – and more than that, you may pay for a copy but you will never really own it. It will be stored away on an external computer somewhere far away, and should your internet connection drop or should Sony go bankrupt in the future, you will automatically and instantly lose access to everything you have paid for. This is a limitation that will rely somewhat on the future of internet speeds and connections, and how fast telecommunications providers are willing to push new cables and speeds to the masses.

Another sticking point will be pricing, because there is already a movement that is fighting against paying the recommended retail price for games purchased digitally. This is a fair point – digital distribution may not be cheap, but it is cheaper than printing out discs and manuals and shipping huge volumes of plastic to various retailers. Consumers are still yet to see any tangible financial benefit to this – all that is happening is the costs that would be swallowed up by these otherwise expensive printing and shipping deals instead get divided up and shared equally between the distributor, the developer and where applicable, the publisher. This has driven a lot of consumers to complain that they are being asked to pay more often for far less, and where DRM and always-online requirements are needed, that there will be times where they simply can’t play it because they are on another computer, or away from home.

Cloud Gaming exacerbates this problem tenfold – it’s something OnLive has done quite well, by offering discounts along with its subscription model on the latest releases, but it still means that the consumers cannot dictate or influence the costs involved. With retailers out of the picture to drive prices down via competition, an exclusive Cloud Gaming service run by a company solely for their own products has no competition and therefore, they can set prices as and where they like. Obviously they don’t want to price people out of the market, otherwise it defeats the purpose of having the service in the first place, but it will mean that prices can change or remain artificially high for much longer periods of time than you would otherwise like. Pricing is a huge deal-breaker for this kind of future, and it is one that could cripple its progression in the coming years.

It sounds like a real downer to end on. I know. So let’s cheer ourselves up a bit.

What Sony have done here – in my opinion – is not to compete with digital services in the next four to five years. It will, but it will largely be for its own benefit with its own games. What Sony have here is the recipe to preempt Nintendo and Microsoft with the PlayStation 5. Yes, the PS4 is all well and good and will continue to use discs, but with a solid base in place for cloud gaming, it also means that the PS4 can survive or even be the transitional point towards more powerful hardware in the future, as the machine itself will not need to contain all the new hardware, merely need to be capable of serving as the communal point between gamer and games on the cloud. This means future hardware and R&D costs will be minimalised and perhaps even save Sony money in the long term. Hopefully, we consumers at that point will see the financial savings passed onto us, a world of super-high-definition gaming which is cheaper, more reliable and served to us without us having to download anything, or install anything, or buy anything, or even wait for anything to arrive. It will be fast, instant and most importantly, accessible.

Sony will always have to decide what to do with those who cheat in online multiplayer games, or if they have to ban people. That is a tricky sticking point no-one has really tried to tackle head on, rather slink around, but on the upside, perhaps it may also encourage people to NOT cheat. If you can face losing your hundreds of pounds worth of games, why bother being a douche?

And most importantly for Sony – it’s their service now. And they can breathe a sigh of relief knowing that they probably won’t face patent litigation over it. And it will no doubt prompt Nintendo and Microsoft to look into whether cloud gaming is something they also need – forcing them to spend money and navigate the painful patent minefields developing their own methods. Sony simply paid for a helicopter ride over it. And aside from OnLive, there aren’t many cloud services out there who’ll fly them over the minefield either…

Cloud Gaming may not be the now – but it’s a future that, with Sony involved, is looking ever more realistic, ever more tangible. It’s a gamble – but it’s a clever gamble, and one that may take some years to pay off, but if Sony can survive the turbulence of the upcoming next-gen, it’s one pretty much guaranteed to pay off in the end…

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