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Sony's cloud revolution: Why Gaikai could change PlayStation forever

OPINION: $380m deal could have massive implications for PS4, writes Dan Dawkins

In buccaneering terms, Sony has paid $380m for a skeleton key.

A key that unlocks a global network of treasure buried deep in PlayStation's vaults; allowing you to play thousands of classic PSP, PSOne, PS2 and PS3 games - like GTA: Vice City, Gran Turismo and, er, Um Jammer Lammy - plus provide a stunning, playable, glimpse at the potential of PS4.

Sony's long-rumoured acquisition of cloud streaming service Gaikai is a technical shortcut that allows Sony to harness its true strengths, its incredible back catalogue of games. In short, Sony might be about to do for videogames, what Spotify does for music - at least, that's the ambition.

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The 'magic' is that you won't only be able to play these games on PS3, or PS Vita, but potentially any electronic device with a screen and a controller, including phones, TVs, laptops and tablets. Well, provided it works, but we'll get to that...

The death of PlayStation 4

The implications for Sony's next console, PlayStation 4 (or 'Orbis'), are huge. In light of Sony's recent £3.6bn loss, the firm faced a stiff financial reality when designing its next console.

Rumours have long suggested that Sony will attempt to assemble an 'off the shelf' PS4, comprised of almost-cutting-edge PC tech, rather than engage in another elaborate, expensive, folly, like the Cell-chip architecture of PS3.

From a business perspective, the Gaikai deal allows Sony to radically disrupt the current, troubled, console model: Manufacturers sell you a subsidised console for £400 and offset the long term cost by selling you £40 boxed games.

The Apple iOS market has shifted people's buying habits and expectations, with £0.69 and 'free' now the new barriers to participation. Streaming allows Sony to unlock the financial barrier of taking a risk on a £40 game, only playable on a bespoke console.

Sony, effectively, could become Sky TV, with a radical shake up in its pricing. You might pay, say, £12 a month for the standard PlayStation streaming service, then £3 for the 'shooters' or 'sports' or 'retro' channel.

Complex bundling and service contracts might give Sony access to secure revenue streams they never previously believed possible - and this security could feed back to game developers, now able to take greater creative risks.

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Backwards compatibility is another winner in the Gaikai deal; previously the only way Sony could make PS2 titles work on PS3 was to include PS2 components in the hardware - at even more expense. Gaikai's tech will allow PS4 to access Sony's entire back catalogue, in theory at least, without the need to integrate expensive PS3 chips, necessary for backward compatibility.

It also, potentially, spells the death for 'HD Collections', like God of War. While desired, they're still produced on - relatively expensive - Blu-rays, plus all the associated shipping and distribution costs. Sony is skipping the 'physical' barrier entirely, like the move from shop bought CDs, to music streamed from the cloud.

In the broader AAA-or-bust games market, with 'mid tier' or risky, innovative games failing to sell, a cloud service provides a convenient sampling solution. Rather than download a demo on PSN over several hours, provided you can find it in the first place, you could, say, tap an advert on your phone to launch a cloud-streaming demo immediately.

It also raises the prospect of PS4 not just being a physical box, like a traditional console, but also a technology embedded in your TV - or rather, making your TV a 'PS4 lite' trialling tool. You could be watching an advert for Call of Duty: Black Ops 3 on your Sony Bravia, then press the equivalent of Sky's 'red button' to activate the streaming demo as you watch.

It seems unlikely Sony will abandon the 'traditional' physical console for PS4 - us hardcore will demand premium frame rates and responses that broadband won't allow (yet) - but you'll be able to trial its games across a variety of platforms.

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