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Sony's Gaikai Acquisition Could Shake Up the Industry

Sony's Gaikai Acquisition Could Shake Up the Industry

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By Chris Pereira

The deal rumored to be announced at E3 has now gone through.

Many believe the future of the games industry is in cloud gaming, where the game you're playing is run on servers located at a datacenter (as opposed to the console/handheld/PC in your home) and streamed to a screen -- a TV, computer, phone, tablet, etc. Should that prove to be the case, Sony has ensured it will be prepared by acquiring cloud gaming company Gaikai for $380 million. It's a deal which has numerous implications, the most intriguing of which is what the cloud's implementation will be in the PlayStation 4 and how that potentially negates the need for another PlayStation console to ever be released.

Back in May it was reported that a deal between Sony and either Gaikai or OnLive would be announced at E3. It's possible that was the case, and due to the particulars still being worked out, an announcement could not be made as planned; the press release Sony Computer Entertainment sent out last night notes the deal still has to go through closing conditions and the usual regulatory stuff. Those should be no issue at all, and knowing the deal is with Gaikai enables us to now better brainstorm what things could look like down the road.

The official announcement gives no indication of where things are headed except to say SCE will "establish a new cloud service, ensuring that it continues to provide users with truly innovative and immersive interactive entertainment experiences." That doesn't tell us much of anything, leaving us to contemplate the possibilities like in May.

Most likely Gaikai will not have a significant presence on PlayStation 3. With the PS4 reportedly coming later next year, it would make sense for cloud gaming to instead be a key aspect of the new console. That does not mean PS3 owners won't see anything new; cloud demos are among the most straightforward benefits to gamers, and something that seems like it could be implemented without too much trouble. Gaikai's existing service is best known for allowing games to be demoed right from within a browser, whether it be on a retailer's website or even Facebook. It's easy to see this sort of service being brought to both the PS3 and Vita (and the PS4, down the line), either through a dedicated app or perhaps as part of the PlayStation Store itself.

The ability to sample a portion of a game immediately without having to wait for it to download is an enticing concept, and the beauty of Gaikai is a demo does not have to be specifically put together by the developers. The Facebook demo of Saints Row: The Third, for example, simply allows the first 45 minutes of the game to be played without any hassle. Publishers could still build a demo if they so wish, or they could opt to make the entire game available for a set amount of play time. As I noted back in May, streaming demos would be especially welcome on Vita, a system which lacks internal storage and uses pricey proprietary memory cards. Whether they are embedded right into the PlayStation Store or accessible through the browser or a Gaikai app, the ability to sample any game without delay is the sort of thing that could give the system a boost at a time where it's facing increased competition not just from the 3DS, but also mobiles phones and tablets.

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Backwards compatibility is another area bolstered by the cloud. Think of a PlayStation 4 capable of streaming any PS1, PS2, PSP, and possibly even PlayStation 3 game. Because the burden for running these games is placed on Gaikai's servers and not your own console, the existing need to include the appropriate hardware to run older titles (such as the PS2's Emotion Engine being included with early models of the PS3) would no longer be the case. It's a stretch to assume the entire library of PlayStation titles being offered on such a service due to rights issues, yet the desire of publishers to make money off of their back catalogs should not be underestimated, particularly if Sony and Gaikai make it easy to offer those games up.

When the cloud gaming deal was first rumored in May, I thought PlayStation Plus subscribers would eventually be given access to full versions of streaming games. Instead at E3 Sony announced a regular rotation of PS3 games that subscribers could download and keep for as long their subscription is active. Shifting this aspect of the program from downloads to streaming games in the future seems like a natural way to go, both because it will avoid the unpleasantness of downloading such a huge amount of data and because it gives Sony more control over how and when those games are played.

In addition to (or in place of) this, Sony might even offer a standalone subscription service that grants instant access to a larger number of streaming games, almost like a videogame version of Netflix's Watch Instantly service. Not everyone may like the idea of paying to play games they will only have access to when their subscription is active, but the availability of a premium service that grants access to hundreds of games from multiple PlayStation systems sounds like a nice bullet point for Sony to have when it comes time to sell gamers on the PS4.

There are other possible benefits for Sony in making this deal, such as saving gamers the trouble of ever patching their games. I've also heard the idea of Internet-connected kiosks in stores that allow customers to sample every game on PS4 or Vita with the push of button, which would be much more effective than the limited offerings seen in kiosks presently.

There is some bad news in all of this, although just how it will affect you may vary. As I mentioned with the idea of streaming games for Plus users, Sony would gain a great deal of control over how games are played. Selling or buying used games would be impossible with streaming games, nor would it be possible to borrow games from friends. The latter issue could be covered to some degree by streaming demos, although many would hate losing the ability to have a physical copy of a game in-hand that they could do whatever they please with. Gamers take issue with the occasional game that requires an Internet connection to play; all streaming games would invariably require a constant, stable connection to the Internet.

The solace for those who shudder at the thought is the fact that the PS4 will undoubtedly offer disc-based games (just as we know the Vita will continue to offer downloadable and card-based games). Cloud gaming will, at least initially, be presented as an optional way of playing games, and in some cases it may still manage to be of use to those who despise always-online requirements. Imagine being able to continue playing any PS3 or PS4 game on your Vita while on the go. The issue of how the lack of L2/R2 buttons are handled aside (mapping them to the rear touch pad is one possibility, albeit not an ideal one), that would be a big step forward from the current situation where this can be done with the occasional game.

Eventually, though, cloud gaming could prove to be the sole method of distribution for games. In theory, the PS4 could be the last console you ever have to purchase. While its hardware will age over time, it will always be capable of handling streaming content, so as advances are made in technology and new games require higher-end hardware, Gaikai's servers could be upgraded to handle that demand. So although the first portion of the PS4's life will operate similarly to the current generation, by the time 2020 rolls around we might see games requiring hardware exceeding the PS4's capabilities offered to PS4 owners exclusively as streaming titles.

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Even if cloud gaming is implemented in the PS4 right out of the box, there will probably be no need to worry about missing out on games as a result of having a poor Internet connection. While we've been seeing many games offered exclusively as downloads this generation, publishers know there is a difference between consumers with Internet connections capable of downloading a title and those with Internet connections capable of providing a competent streaming game experience. (Some Gaikai demos work with 3Mbps connections, but generally 5+ is desirable.) At this point in time, few have access to the kind of connections necessary to play a streaming game that is indistinguishable from one that is played locally. However, between advances by ISPs and Gaikai improving its technology, that may no longer be the case a decade from now and publishers could feel more comfortable offering streaming-only games. (It remains questionable how viable streaming games will be for those with bandwidth caps).

We likely will not be hearing about specifics on how Gaikai will be taken advantage of for some time; certainly its PlayStation 4 presence won't be revealed until the system itself has been announced, meaning those details may not come out until next year's E3. There are a lot of other questions that still need to be addressed, too, such as how Sony will handle Gaikai's partnerships with competitors like LG; will it use those existing deals to let consumers sample games that can only be played in full on PlayStation 4 or Vita? At the very least, Kaz Hirai, with his new "One Sony" initiative, would presumably like to see Gaikai's technology leveraged outside of the PlayStation systems.

Whatever the case may be, this Gaikai deal stands a chance of dramatically changing the gaming industry and the way new consoles are released in order to keep up with technological advances, not to mention the pressure it puts on Microsoft not to fall behind in the cloud space. Whether it manages to do that with an OnLive acquisition or something else, it should be incredibly interesting to see where things go from here.

Galaxy Nexus no longer available to purchase from Google Play website

In April, Google started selling unlocked Samsung Galaxy Nexus smartphones from its own store, for $399 a pop. Six days ago, the price dropped to $349. Now, however, the phone is listed as "coming soon" on Google's website. We're not sure whether Google is simply updating the boxed handsets to Android 4.1 Jelly Bean, obeying a preliminary injunction in federal court to stop sales, or applying a software patch to avoid said ban. Or, maybe the company just ran out of handsets due to early Android 4.1 adopters and those hoping to get a Galaxy Nexus assuming they'll be banned? No matter the reason, you can't buy a Galaxy Nexus directly from Google right now. We've reached out to Google for clarification and will update when we hear back.

iPad mini rumor resurfaces

The iPad mini rumor that has apparently been circulating since 2009 is back in another round of speculation.

The latest version comes courtesy of multiple sources. Firstly, NPD DisplaySearch said that production is "likely imminent" for a 7.85-inch tablet while a Chinese-language Web site reports that this smaller iPad will use an IGZO display made by Sharp.

Meanwhile, Bloomberg has added fuel to this rumor with a new report that pegs a future announcement in October. The iPad mini "will have a screen that's 7 inches to 8 inches diagonally", but lacks a Retina display. Instead, it will have a similar screen resolution as the older iPads. The iPad mini will, however, be expected to be priced around that of Google's new 7-inch Nexus tablet.

With Google and Microsoft both making moves in the tablet space with the Nexus and Surface, it's not surprising that rumors about the iPad mini have resurfaced. However, these two companies lack Apple's retail presence, which could hinder their efforts to make their tablets mainstream.

The breadth of its App Store also favors the Cupertino-based company, though Android is rapidly catching up--going by the latest numbers, Google's platform is just 50,000 apps shy of Apple's.

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Tablet shipments to overtake notebooks in 2016, NPD says

Tablets may indeed herald the coming of a "post-PC world," but that world won't arrive for another few years, NPD said on Tuesday. According to the latest NPD DisplaySearch figures, tablet shipments in 2016 will top 350 million units, putting them ahead of notebook shipments for the first time ever. NPD projects that tablet shipments will have a compound annual growth rate of 28% over the next five years as the total number of shipments rises from 121 million in 2012 to 416 million in 2017. Notebooks, meanwhile, will see shipments grow from 208 million in 2012 to 393 million in 2017.

Tablet Shipments to Surpass Notebook Shipments in 2016

Total Mobile PC Shipments Exceed 800M Units by 2017

SANTA CLARA, CALIF., July 3, 2012-Tablet PCs, such as Apple's iPad, are expected to be the growth driver for the mobile PC market over the next few years. Tablet shipments will surpass notebook shipments in 2016, according to the latest NPD DisplaySearch Quarterly Mobile PC Shipment and Forecast Report. Overall mobile PC shipments will grow from 347M units in 2012 to over 809M units by 2017.

While notebook PC shipments are expected to increase from 208M units in 2012 to 393M units by 2017, tablet PC shipments are expected to grow from 121M units to 416M units in this period, for a compound annual growth rate of 28%. A key driver for tablet PC growth is adoption in mature markets (including North America, Japan and Western Europe), which will account for 66% of shipments in 2012 and remain in the 60% range throughout the forecast period. Tablet PC shipments into mature markets will grow from 80M units in 2012 to 254M units by 2017.

Source: NPD DisplaySearch Quarterly Mobile PC Shipment and Forecast Report

"Consumer preference for mobile computing devices is shifting from notebook to tablet PCs, particularly in mature markets," said Richard Shim, senior analyst at NPD DisplaySearch. "While the lines between tablet and notebook PCs are blurring, we expect mature markets to be the primary regions for tablet PC adoption. New entrants are tending to launch their initial products in mature markets. Services and infrastructure needed to create compelling new usage models are often better established in mature markets."

Source: NPD DisplaySearch Quarterly Mobile PC Shipment and Forecast Report

Building upon convenience-oriented features including instant-on capability, long battery life and extreme portability, tablet PCs are expected to evolve in form factor and performance, making them a compelling alternative to notebook PCs. Tablet PCs are expected to incorporate multi-core processors, increasingly stable operating systems, growing app libraries and higher resolution displays.

In addition, notebook PCs are also evolving to meet the challenge from tablet PCs. Thinner form factors, higher resolution displays and touch functionality features are expected to increase. The notebook PC market will remain the largest part of the mobile PC market during the forecast period, accounting for 60% of mobile PC shipments in 2012, declining to 49% by 2017.

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Sergio Pininfarina, Designer of Sports Cars, Dies at 8

Sergio Pininfarina, whose design firm created the rakish and elegant auto bodies of some of the most popular, and fastest, cars ever made by Ferrari, Alfa Romeo, Maserati and Fiat, died on Tuesday at his home in Turin, Italy. He was 85.

His death was confirmed by a spokesman for Ferrari, where Mr. Pininfarina was a board member for many years.

Mr. Pininfarina took the reins of the company in 1961 from his father, Battista, who founded it under the name Carrozzeria Pinin Farina in 1930 and then rebuilt it virtually from scratch after Allied bombers destroyed its plant along with the rest of Italy's industrial base in World War II.

The younger Mr. Pininfarina, who brought a flair for marketing as well as design to the family business, scored his first successes in collaboration with Ferrari, the racecar maker known for its lucrative business in rich men's toys.

Convinced that a new consumer market was emerging, Mr. Pininfarina urged Ferrari to let him design two auto-body prototypes for a new 12-cylinder racecar-quality vehicle under production in early 1960s.

The first, known as the 250 GTO, was an extremely expensive racecar built mainly for sheiks and movie stars. (Of the 39 cars built in 1960, one sold recently for $35 million.) The second was a production model, known as the 250 GTE, a slightly powered-down version of the original, sold for $15,000. And though it cost a small fortune, it became one of Ferrari's first big sellers.

The success led to one of Mr. Pininfarina's best known Ferrari designs, the Dino series of midengine cars produced from 1968 to 1976. The Dino's bug-eyed front, grading gently to a curvaceous rear end, became a signature of the Italian look in sports cars. Designed to compete with the stark line of the new Porsche 911, the Dino series propelled Ferrari and Mr. Pininfarina into the mass-market car business.

"Ferrari would not be Ferrari without Pininfarina," said Michael Sheehan, founder of the online Ferraris' collectors newsletter, Ferraris-online.com. "Ferrari built the machines, and basically Pininfarina clothed them."

Mr. Pininfarina's firm worked with many other carmakers over the last 50 years, including some in the United States. The Pininfarina stamp - an "f" surmounted by a crown - has appeared in millions of cars by Alfa Romeo, Fiat, Maserati, Rolls-Royce, Chevrolet, Cadillac, Bentley, Volvo and Peugeot. But for most of that time Mr. Pininfarina was, in effect, the design department of Ferrari. Only a handful of car models made by Ferrari were designed by other companies.

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For a while, Mr. Pininfarina stood as the chief custodian of Italian styling in cars. His firm designed prototypes for models that sold about 50,000 units a year by the mid-1980s, compared with about 500 in the early 1960s, and the success gave him freedom to design not only "affordable" cars but high-end and even one-of-a-kind vehicles for the very wealthy.

"I am a lucky man, because I design cars for a few people," he said in a 1981 interview with The New York Times. "So in my life, I always design what I like. I sell cars to people who like that kind of car."

But by 2000, the landscape of car making had changed considerably. A shift in the market toward economy and fuel efficiency reduced the base of Mr. Pininfarina's carmaker customers, and shifted his firm's work toward Asia and the market for subcompacts.

In a 2000 interview with The Times, Mr. Pininfarina described the trajectory: "We have gone from being tailors to selling to consumers," he said.

By 2008, the family had lost control of all but a small share of stock to creditors, though family members continue to operate the firm.

Mr. Pininfarina was born in Turin on Sept. 8, 1926. He earned a mechanical engineering degree from the Polytechnic University of Turin in 1950, and became the firm's managing director in 1961. His father died in 1966. He turned over control of the company to his son Andrea in 2001. After Andrea's death in a motor scooter accident in 2008, Mr. Pininfarina's younger son, Paolo, became head of the company.

Besides his son, he is survived by his wife, Giorgia, and daughter, Lorenza.

A courtly and stylish man of wit and charm, Mr. Pininfarina taught car body design at his alma mater for several years, and was often invited to speak to engineering and design groups in the United States. On one visit in 1981, an interlocutor asked, "What makes a good design?"

He replied with a long list of criteria, including "good harmony, classic style, proportion, grace - and honesty," adding with a small smile, "Then, if you have good taste, the battle is won."

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