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Cloud gaming shake up: Sony acquires Gaikai, integrates OnLive on its upcoming Google TV

July 2, 2012

There are two important cloud gaming services right now: OnLive and Gaikai. And it seems that Sony wants to integrate both of them into their current and future products.

First, it looks like Sony plans to include support for the OnLive cloud gaming service in their upcoming Google TV set top box,  memorably named NSZ-GS7. The features of Sony’s set top box will hopefully justify its $200 pricetag, considering that the Vizio Co-Star Google TV is due to arrive for $100, also with OnLive integration.

Sony is making an even bigger move in the cloud gaming space with the just announced acquisition of Gaikai, OnLive’s main competitor, for $380 million. It’s not certain whether Sony plans to support both services in the future or not; my guess is they planned the OnLive integration for a while on their GoogleTV, and when they saw how good it is, they decided to adopt OnLive’s business model by acquiring Gaikai.

The interesting thing about cloud gaming is that it could replace gaming consoles and even make powerful PCs obsolete, by allowing people to play advanced 3D games on low-performance devices, such as $100 set top boxes, tablets, or cheap laptops. If services like OnLive are made available to many affordable devices, or devices you already own, it could turn the console market upside down. Basically, you won’t have just two or three expensive consoles competing for your money, but just about any device will serve as a console.

Of course, with the acquisition of Gaikai, Sony might be looking to keep the service for themselves as a proprietary technology instead of the “open cloud gaming” service that Gaikai called itself until now. As of now, competitors will only be able to license OnLive or make their own similar product.

If cloud gaming really is the future, then Sony is making the right move here, adapting to it early one, rather than fighting it (and losing).