Ars got to check out a demo of the service running on a Bravia TV and PlayStation Vita on the show floor, and at first was pretty impressed. The games ran with no discernible lag between button input and on-screen action, and while there were some video compression artifacts and color clumping from the streaming process, the 720p image looked decent enough.
Then Ars asked a nearby representative where exactly these games were being streamed from. "Oh, we have a Gaikai server running down the hall" he replied nonchalantly.
The representative went on to explain that external Internet access was not ideal on the crowded CES show floor and that the company wanted to provide a proof of concept for the service rather than a "live" demonstration. That's all well and good, but a demo streamed from a local server tells users almost nothing about what the PlayStation Now experience will be like in the real world.