Sony acquires Gaikai in bid to dominate gaming world through cloud computing

The clouds opened up recently with news that Sony had acquired Gaikai, a provider of cloud-based gaming for over $380 million, illustrating perhaps the historical value of beating a potential threat by buying that threat (See Forbes article).

“Through the acquisition, SCE will establish a new cloud service, ensuring that it continues to provide users with truly innovative and immersive interactive entertainment experiences,” said Sony.

This massive cloud computing play has led many to speculate the potential buy-out of Onlive by Microsoft in an attempt to even the playing fields for X-Box vs. Sony PlayStation.

Sony made it clear it was after Gaikai’s technological strength and engineering talent, that it hopes will help it build out new cloud infrastructure to power a new generation of entertainment, gaming and multimedia products and services.

Virtual Internet has seen massive growth in gaming companies embracing the cloud, including the recent news that Bossa Studios had signed up for a VI CDN solution to help power its social game, Monstermind.

Sony is attempting to capture its own share of the cloud market (and engineering benefits) with the Gaikai acquisition stating that  “SCE will deliver a world-class cloud-streaming service that allows users to instantly enjoy a broad array of content ranging from immersive core games with rich graphics to casual content anytime, anywhere on a variety of internet-connected devices.”

Gaikai said they were pleased to help Sony rapidly harness the power of the interactive cloud and to continue to grow their ecosystem, to empower developers with new capabilities, to dramatically improve the reach of exciting content and to bring breathtaking new experiences to users worldwide.

Cloud computing is now one of the top priorities for just about every major Fortune 400 tech company including HP, Dell, IBM, Microsoft, Google and Yahoo.    It’s predicted that by the year 2020 nearly 80% of all computing resources and use will take place through the cloud.

In addition by the year 2013, most web access will take place via a Smartphone or Tablet, exceeding laptop or desktop usage.  The convergence of mobile computing and cloud computing is accelerating the pace of technological change in SMEs and large enterprises in ways not seen since the popular inception of the Internet.

The acquisition by Sony is acknowledgement of this trend and raises interesting questions related to performance and competitive advantage.

“Games delivered through the cloud, with most of the heavy-lifting done server-side, can make subpar gaming machines run games much more efficiently, though this concept still has a ways to go. Since the games are delivered online, issues with latency can create snags of their own, cancelling out, to some degree at least, any gains made in processing power,” said Forbes Magazine.

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