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Microsoft reacts to Sony buying Gaikai: "Cloud is a big area of investment for Xbox"

Sony made a huge splash in the games business today, picking up cloud gaming firm Gaikai for a cool $380 million. Rival Microsoft isn't sitting idly by, however. When GamesIndustry International asked for reaction to the Sony news, a spokesperson noted that the cloud will continue to be hugely important for Microsoft.

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donniebaseball1422d ago

I think the Gaikai news is huge for Sony. MS should just go buy OnLive imo.

cstyle1422d ago

They don't need to. They have the resources to have their own cloud gaming. besides sony really needed to do what they did in order to get back where they were in the TV market.

Jihaad_cpt1422d ago

have you heard of Microsoft they by everything. Only once money cannot work will they commit other resources. Yahoo for example.

ChunkyLover531422d ago (Edited 1422d ago )

I just said the same thing, everyone will look to Microsoft to buy OnLive, but I don't see that happening. Microsoft is well known for wanting to run their own services. OnLive might be an option, but I think their plan has always been to build Cloud from the ground up.

If you look at the "leaked documents", it clearly states Microsoft is looking to have Cloud in a few years. I'd think that means they have had a plan on the books for a while now.

I tend to think Sony bought an established service in order to offer some semblance of backwards compatibility with the PS4, if its true they dropped The Cell, they will need a service to offer people the ability to play those older games.

nukeitall1422d ago

I think Sony is in panic mode and decided to buy up Gaikai. There is no reason why MS would want OnLive (or Gaikai) for that matter. The technology isn't super secret or particularly difficult to do. In fact, nVidia is the provider for Gaikai with GeForce Grid which is technology anyone can buy.

So if the technology isn't what Sony want, the customer base is unlikely as there likely isn't many and branding is kind of useless since Playstation is a far stronger brand. The only thing I can come up with is patent, but I can't imagine there being many. This isn't some super high technology stuff, so the final thing is infrastructure and the only reason you want that is because you yourself can't scale up that fast.

Which makes sense, since Sony isn't exactly a player when it comes to cloud technology. Still $380 million is steep, very steep.

@Jihaad_cpt:

MS aren't exactly going for resources when they buy. They usually go for instant marketshare something that is extremely hard to get even if your product/service is better.

@ChunkyLover53:

I hardly think paying $380 million for BC is worth it for a service that gives you sub-par experience combined with a need for *very* high speed internet. By that time, PS3 will be dirt cheap anyhow and the Cell chip will be dollars in cost, not tens.

Best case scenario, they are going to give access to PS4 for PS3 users as a service. Assuming they have fast enough service.

SilentNegotiator1422d ago

They had resources to make their own social networking, too....

Neko_Mega1422d ago

Really? So how is Sony in panic mode? They got more new titles coming out then 360 has. So far all we know about the 360 is it is getting Smartglass and some new titles.

Where Sony is sitting on a huge list, plus who says this is for PS3? For all we know. Sony could be buying this for PS4 and besides I think Microsoft has been falling behind with the lack of titles.

DeadlyFire1422d ago

Microsoft is more likely to partner or buy up OTOY. They have tested their service mostly on Microsoft hardware, phones, and X360 game controllers since 2008.

OnLive is great and all, but I don't believe Microsoft is 100% towards them.

nukeitall1422d ago (Edited 1422d ago )

@Neko_Mega:

What part of my comment was unclear?

Why would a company buy another company when the benefit is minimal? It seems Sony is buyin up Gaikai for the infrastructure, not the technology since it is widely available.

The only reason you buy something like that which is available to anyone, and pay premium is because you are unable to build and scale it up yourself and you want it FAST!

This is a business strategy, not I got so many games releases so I'm immune to the *potential* shift in the industry.

@Patriots_Pride:

OnLive uses hardware compression, but clearly there isn't a problem for Gakai to implement similar technology. In fact, Gaikai uses nvidia Grid, which anyone can purchase. Clearly the patent isn't a necessity.

Certain patent are so obvious you can't really work around it, unfortunately this technology isn't that. Many forms of this already exist prior so I don't believe it's worth half a billion dollars.

sjaakiejj1422d ago (Edited 1422d ago )

"The technology isn't ... particularly difficult to do"

Lol, you have no idea how clueless you sound. The amount of technology that has to go in to a cloud gaming platform such as OnLive and Gaikai is extremely complex. It requires years of testing and refining to get it right, and that's even disregarding all the patents that Gaikai and OnLive have in the technology (there's far more to it than just video compression). You can't just "build one of your own". It requires a large investment, a lot of risk and extremely competent programmers.

Implementing it isn't easy by any stretch of imagination. Think about the different factors involved - users are guaranteed to have an unreliable connection, but you can't let that affect gameplay. How about latency? Distance to servers? Dynamic Compression? How about variations in bandwidth and network load? All of these problems have to be invisible to the users, and that's where the difficulty comes from.

nukeitall1422d ago (Edited 1422d ago )

@sjaakiejj:

"Think about the different factors involved - users are guaranteed to have an unreliable connection, but you can't let that affect gameplay. How about latency? Distance to servers? Dynamic Compression? How about variations in bandwidth and network load?"

You mean how this is something people have implemented all along with online video services and multiplayer games?

This isn't some vodoo technology and is something these companies have been refining for years. Where do you think CDN comes from? Even nvidia has a product called GRID that is used by Gaikai for just this purpose. It's practically off the shelf!

This is well known problems, and if you can't do it with the size of Sony for far less than $380 million, you got major problems. The answer is, they are panicking and buying up infrastructure, because they can't scale up fast enoug.

I hate to say I told you so:

http://n4g.com/news/1029231...

sikbeta1422d ago

Competition is always good, if this means MS going the same route, bring it on!

sjaakiejj1421d ago (Edited 1421d ago )

Nukeitall

Lol at the troll article you posted. Not that it proves anything, so I'm not sure _why_ you posted it...

OnLive took 7 years to develop, from conceptualisation to functional system. Gaikai started development later, but development still took 3 years, with the concept already in place.

What does this mean? 3 Years of development for a platform is a long time, and there's two reasons as to why that might be:
1) The system is extremely big
2) The system is very complex.

Online Video Streaming and Multiplayer games are a world apart from the technology used in Cloud Gaming. Latency and bad connections is not an issue for video streaming, as it doesn't matter if the user has to wait for a few seconds. Latency and bad connections have a lower impact on online games as well, as predictive algorithms can be used to approximate where a player is at any given time. The problem is, you can't do either of those things in Cloud Gaming. Input has to be precise, there is no room for error - predictive algorithms are thus out of the question. Latency is a major issue due to input, so ignoring that is also not possible.

These systems, as simple as they may seem to the end-user, abstract away immense amounts of technical innovations and accomplishments.They are, along with games, some of the most complex software systems in the world.

On top of that, with that $380 million which Sony paid in shares (e.g. they did not pay in cash), Sony immediately acquires a large list of intangible assets, such as patents, brand name and partnerships, as well as tangible assets such as Server Farms, User Base and Infrastructure.

GRID is a technology that supports the video compression ratio, but it still requires an extensive framework to make use of it. It's not some kind of magic device that does everything for you. It's comparable to a GPU - Just because you have a GTX680 does not mean that Command & Conquer 95 will suddenly have mind blowing visuals.

nukeitall1421d ago

@sjaakiejj:

First of all, you don't have to explain technology to me. I'm well aware of all of this as I work with it on a daily basis.

Now to the main point, since it took OnLive 7-years and then Gaikai 3-years, what do you think it will take now?

Fact of the matter is, technology moves forward and with each iteration it is far simpler. When Gaikai started, there was no nVidia Grid, so yes it makes it that much easier. Data is data, doesn't matter if it is an image, video or a text file.

"These systems, as simple as they may seem to the end-user, abstract away immense amounts of technical innovations and accomplishments.They are, along with games, some of the most complex software systems in the world."

Games? Potentially. Networks? Not so much, because most of the problems are almost exactly the same. Poor bandwith, connection quality and poor latency. Video encoding is a well known problem!

"Sony immediately acquires a large list of intangible assets, such as patents, brand name and partnerships, as well as tangible assets such as Server Farms, User Base and Infrastructure"

This is exactly my point. The Gaikai brand wasn't strong to begin with and the Playstation brand is far more valuable. Gaikai doesn't have a viable business. Heck, OnLive doesn't have a viable business yet whom is bigger and one of the earliest players.

All Sony got was some patents (probably very few valuable ones as the technology isn't groundbreaking) and server farms i.e. infrastructure. User base is probably negligable. That is why I think it was a bad deal for Sony.

"It's not some kind of magic device that does everything for you. It's comparable to a GPU - Just because you have a GTX680 does not mean that Command & Conquer 95 will suddenly have mind blowing visuals."

What? I think you are confused about the technology. Gaikai used to use software video encoding for their cloud games, but now uses nvidia Grid. What Grid does is provide two GPUs, one for partially hardware accelerated video encoding and another one for regular graphics with fast frame buffer access. This technology is available now for anyone to buy from nVidia and has nothing to do with "because you have a GTX680 does not mean that Command & Conquer 95 will suddenly have mind blowing visuals." The frame work is partially provided by nvidia, but nothing a team of engineers can't do for less than a million dollars in far less than 12-months.

The hard part isn't the technology, it is the infrastructure i.e. the server farms, but even that is far easier to obtain today than ever.

sjaakiejj1421d ago

" I'm well aware of all of this as I work with it on a daily basis. "

And I'm President Obama

"Now to the main point, since it took OnLive 7-years and then Gaikai 3-years, what do you think it will take now? "
First game took longer to develop than those that followed as well, but those that followed all had a roughly similar development cycle.

I'm not even going to bother to respond to the rest, because of this:
"Games? Potentially. Networks? Not so much, because most of the problems are almost exactly the same. Poor bandwith, connection quality and poor latency. Video encoding is a well known problem! "

You make a fundamental mistake in your assumption here - Just because the problem is always the same does _not_ make it easy, _especially_ for distributed computing. How do you ensure the user actually receives the package? Do you use TCP or UDP? Why is TCP a bad choice for Cloud Gaming? Why is UDP a bad choice for Cloud Gaming? Those are the most basic questions that you can possibly ask, and yet the answer to the question of which protocol to use is already very difficult.

As for GRID, GRID is a technology that supports hardware encoding of video. Whilst it may speed up the process of encoding, it does not solve any of the networking problems, nor does it mean that having GRID technology somehow makes implementation of cloud gaming easy. If you actually had _any_ experience in this area whatsoever, you would know that.

Oh and 10 million users is "negligible"? I rest my case.

+ Show (10) more repliesLast reply 1421d ago
Patriots_Pride1422d ago

@cstyle - you are correct by saying that MS can build their own cloud gaming service but OnLive holds a large portfolio of cloud gaming patents which includes U.S. patent #7,849,491 which key factor to the patent is low-latency video compression. This technology compresses video content and reduces lag seen onscreen, allowing users to play motion-based games running on servers thousands of miles away without seeing lag.

Some times its cheaper and easier to just buy a company for its patents than to pay royalties or try to find a work around the patent.

onyoursistersback1422d ago

"was that a joke?!" lol.......

Mounce1422d ago

Yea, and any Gaikai vs OnLive comparison shows truly what service is superior, Gaikai runs better quality and textures AND runs it smoother.

http://www.eurogamer.net/ar...

TekoIie1421d ago (Edited 1421d ago )

Lol that was just like the console war with Multiplat graphics XD.

There were areas where OnLive seemed to have an edge and then you thought Gaikai had the upper hand in area's. There was only one point though where i felt i could see little more detail on Gaikai.

But overall... Literally no difference when you play it unless you try to find differences...

Mounce1420d ago

There's definitely a difference, I have Amnesia on OnLive and it has a sort-of Mouse-lag, a 1-2 second delay that irritates the fuck out of me, it can get blocky-textured as hell for me too, my internet definitely as fine as in comparison, when my internet was bogged down one day even I tried playing The Witcher 2 on Gaikai and holy shit the graphics were better than what my i7 laptop could pull off! -_- AND it ran smoother than any experience I had with OnLive. (Laptop is Asus G73JH-A1 btw)

Imalwaysright1422d ago (Edited 1422d ago )

"I think Sony is in panic mode" So expanding their business and doing it 1st than their competition is an act of desperation? Sony clearly made market research and they believe that acquiring Gaikai will be advantegeous to them. They wouldnt just throw their money away if they didnt believe that it wasnt a viable business option.

And yes MS can make their own cloud gaming service and to be honest i dont know what it takes to start one up from scratch but i do know that Sony would have one advantage: market share and in business market share is everything!

+ Show (2) more repliesLast reply 1420d ago
NYC_Gamer1422d ago

I believe all 3 console brands will be involved in cloud gaming one way or another

Mr_cheese1422d ago

smartest answer ;) bubble.

Arnon1422d ago (Edited 1422d ago )

I'm glad to see that the big names are considering all of this. Cloud gaming has a lot of potential.

DeadlyFire1422d ago

I do as well.

Gaikai - Sony
OTOY - Microsoft. Been tested on X360 controllers, Windows phones, and Microsoft branded devices since 2008 I believe.
OnLive - Nintendo

That's what I believe anyway.

Knushwood Butt1422d ago

Nintendo will get involved last when the technology is a lot cheaper, and call it Mario's Cloud.

+ Show (1) more replyLast reply 1422d ago
shutUpAndTakeMyMoney1422d ago (Edited 1422d ago )

Funny all the technology comes from pc and is now going back to the source. pc.

When all the disks go away everyone will just be a cloud pc gamer. Crazy..

NYC_Gamer1422d ago

consoles are mini PC's that are just aimed towards gaming

Azmatik1422d ago

LOL the game is held on a server not played off a PC at all

Bladesfist1422d ago (Edited 1422d ago )

LOL A server is a PC it has storage, memory, a processor and an OS. Even your router is running an OS and has the above.

Educate yourself. http://en.wikipedia.org/wik...

Rhythmattic1422d ago

PC... "Personal Computer"

A Server is not.

sjaakiejj1422d ago

Blades

A server is a computer, but not a PC. Whilst the terms Computer and PC have been used by the mainstream interchangeably, they do not mean the same thing.

Bladesfist1422d ago (Edited 1422d ago )

My laptop is a web server, It runs linux. It is a PC. How can you say it is no longer a PC because it runs a server (A server is a piece of software, not hardware...). I still use it for personal use.

sjaakiejj1421d ago (Edited 1421d ago )

Blades:

From your own link

"In most common use, server is a physical computer (a computer hardware system) dedicated to running one or more such services"

A server is only a piece of software in the case of client-server architectures, often used locally.

If you use to broad definition of a server, you're still incorrect - A server is a computerised process that shares a resource with a client process.

It is most definitely not a PC, but may in many cases be a computer. (Just because your truck is a vehicle does not mean that all vehicles are trucks. Likewise, just because your PC serves as a Server does not mean that all Servers are PCs. ).

+ Show (3) more repliesLast reply 1421d ago
cstyle1422d ago

"When all the disks go away everyone will just be a cloud pc gamer. Crazy.."

Not really...Cloud gaming will be streamed on TV too which was a smart move by sony to buy this Gaikai.

shutUpAndTakeMyMoney1422d ago (Edited 1422d ago )

Ok so stream games on a tv from a pc? still a pc gamer. A pc can be plugged into a tv now because it's the most flexible platform.

sarshelyam1422d ago

I completely understand what you're saying. The output doesn't matter when the source is predefined. You may be playing it on a mobile device, or a home console connected to a TV, but the reality is it's still PC gaming!

DragonKnight1422d ago

Do you all want a star or something? You're acting like the PC platform is your child that just made the honor role. *sigh* PC fanboys.

Laxman1422d ago

PC fanboys... They're the worst of the the worst.

LightofDarkness1422d ago (Edited 1422d ago )

Hey look everyone, it's dragonknight trying to antagonize PC gamers again! Go ahead, now it's your turn to cry about how beset upon you are by PC gamers and it's not your fault.

+ Show (1) more replyLast reply 1421d ago
Mr_cheese1422d ago

@shutUpAndTakeMyMoney there will be no pc our end when using the TV, that is the point Cstyle is trying to make.

sarshelyam1422d ago

And the point @shutUpAndTakeMyMoney has clearly outlined is that it doesn't matter what your output is, the source is PC-based. So while you may have the form factor of a home console and a television, you're streaming, via Cloud, PC-sourced gaming!

Azmatik1422d ago (Edited 1422d ago )

lol are u guys serious, ur tellin me when i stream a game from cloud my ps3 isnt doing any GFX or processing lol buncha bafoons. trying to make it sound like a PC could run AAA sony titles LOL the game is held on a server not played off a PC at all

KwietStorm1422d ago

LOL spin cycle on repeat with you guys

Bladesfist1422d ago

@Azmatik You make console gamers look really stupid, your GPU is being used all the time, even when your PS3 is idle it will be at 0-5% When watching video content (Streaming) it will be higher. All the console will be doing is decoding and playing a streamed video feed.