WSJ reports that Playstation 4 to be announced Wednesday will stream PS3 games using the Gaikai gaming service Sony bought last July.
As everyone knows Gaikai was the launch partner for Nividia's Grid Cloud Gaming Hardware.
Sure AMD has the PS4 console hardware win, but I bet everyone will be sitting up and taking notice of the Cloud streaming service. Nvidia should benefit too.
In addition, AGAWI, Playstation, G-Cluster, Ubinto and two other cloud gaming services have selected Nvidia Grid for their hardware.
Where all this ends up will anybody's guess, but we should have the first inclination of who the ultimate hardware company winner is Wednesday. Watch the reaction of AMD PPS...everyone knows they have the console win, but also watch Nividia's PPS because very few people have contemplated the likely hood of Cloud Gaming taking off. With a large well recognized Gaming and media company such as Sony backing the feasibility of Cloud gaming should cause a lot of people to sit up and take notice.
Take a look at the small China company STV China Digital. They could really benefit as China gaming is about to explode. The PC gaming is a huge market. This is one step bigger and very profitable. STV could be a grand slam.
"More than a decade ago, the Sony Corp. 6758.TO -1.22% executive credited as the "Father of the PlayStation" predicted that one day videogames wouldn't require a console, because the hardware would eventually "melt" into a network that linked players together. All they would need, Ken Kutaragi said, is a display and a controller.
As Sony prepares to take the wraps off a new home console, it will take one major step closer to that vision. The Japanese electronics conglomerate's next PlayStation will allow users to play games streamed over the Internet as well as on discs, according to people familiar with Sony's plans.
The new feature is one of many expected on Sony's next game machine, which is slated to be unveiled at an event in New York on Wednesday. But the addition of streaming exemplifies how the videogame industry is searching for new ideas to cope with dramatic shifts in technology and consumer behavior.
Videogame companies like Sony, Nintendo Co. 7974.OK -0.95% and Microsoft Corp. MSFT -0.11% used to depend on their twice-a-decade launches of new living room consoles to spur a new wave of spending on consoles that typically cost hundreds of dollars and games priced at about $50 or more. But the Web, mobile phones and tablets have spurred the creation of new, more convenient ways to play games free of charge or for a few dollars.
The results have been dramatic. Sales of new titles, consoles and videogame accessories at U.S. retail stores have contracted every month for more than a year, according to industry watcher NPD Group.
Though both Sony and Microsoft are expected to introduce new consoles this year, consulting and auditing firm PricewaterhouseCoopers expects global spending on console games will shrink nearly 1% in 2013 and rise only 3% next year—far less than the 28% growth the industry saw in 2007 after the last batch of new consoles were released.
Meanwhile, sales of smartphones and other mobile devices have exploded, creating a huge market for inexpensive game apps. Apple Inc. AAPL -1.38% said in January it has sold more than 500 million iPhones, iPads and iPod Touches since 2007, eclipsing cumulative total sales for the three major home consoles combined.
The trend appears to be hurting sales of dedicated videogame devices. Both the Nintendo 3DS and Wii U, released in the past two years and successors to wildly popular machines, failed to meet expectations.
"It's very different than five years ago or 10 years ago," said Blake Jorgensen, chief financial officer of game maker Electronic Arts Inc., EA -1.05% at a recent investor conference.
Console makers have tried to adapt to the market changes, adding features such as Internet connections to allow customers easier play against each other online and connect on social networks. But discs are still used to deliver high-end action games, which require specialized chips to render increasingly more sophisticated images.
So companies have been developing ways to run such software on server systems and stream it over the Internet to customers, an approach sometimes called "cloud gaming." One of them is Gaikai Inc., which was purchased by Sony last July for $380 million. The deal was spearheaded by Sony Chief Executive Kazuo Hirai, a former protégé to Mr. Kutaragi, who no longer plays a day-to-day role at the company.
Since the acquisition, Sony has been investing heavily to prepare Gaikai's technology to enhance its new console, the people familiar with Sony's plans said. Sony has been preparing the technology to be used to allow users to play current PlayStation 3 games on the device, making a broader array of titles available at the outset, these people said. The new device is also expected to play new games stored on optical discs.
But streaming could have implications beyond well-dedicated game machines, potentially allowing Sony's smartphones and televisions to tap into graphics-heavy games they can't play now. Andrew House, head of Sony's videogame unit, said in July that the Gaikai acquisition was a "recognition on Sony's part that the cloud and cloud-streaming technologies are going to have a profound and possibly a very positive impact."
The new PlayStation also will allow players to share achievements on social networks through smoother links to Facebook FB -0.63% or Twitter, while also enabling aspects such as sharing footage of game play online through YouTube, people familiar with Sony's plans said. Sony's new console may also allow users to compete against others using different hardware, such as smartphones and other portable devices, those people said.
Changes are also coming under the hood. Based on prototypes shown to employees and partners, Sony's new PlayStation is expected to run on chips made by Advanced Micro Devices Inc., AMD -1.45% exploiting technology developed for PCs and shifting away from the costly Cell chip that Sony developed along with International Business Machines Corp. IBM +0.67% and Toshiba Corp. 6502.TO -0.50% And, in a nod to the way mobile devices are controlled, Sony has been developing a controller with touch features as well.
New consoles are certainly no longer a guarantee of consumer excitement, as Nintendo found when it kicked off the current upgrade cycle with last year's release of the Wii U. The device integrates a touch screen into the game controller, in addition to long-awaited features like support for high-definition visuals, multiplayer features and a social network.
The reception was lukewarm during its debut in the year-end shopping period. In response, Nintendo slashed its full-year sales forecasts for the new console by 27% to 4 million units by the end of March.
Microsoft's successor to its current console, the Xbox 360, is expected to arrive before year-end, according to people familiar with the software giant's plans. Like Sony, Microsoft has also used AMD chips in prototypes of its new console, those people said, and it has worked on upgrades for the cameras and other components in its "Kinect" motion controller to better identify, track and hear gamers as they play.
Microsoft, while it has tested cloud gaming, is putting greater emphasis on software that allows the Xbox to interact with mobile devices like Apple's iPad. The company is also planning to create new interactive TV content to be played on its consoles, after opening up a new production studio in Southern California.
"We're looking at a very robust content production schedule," said Nancy Tellem, head of the new Xbox studio, at the recent "D: Dive Into Media" conference run by All Things D which, like The Wall Street Journal, is owned by News Corp NWSA +1.44% . She added the Xbox may be known as a game console, but Microsoft wants it to be much more. "Our focus is to transition it to an entertainment device."
The Gaikai Cloud Streaming service is powered by Nvidia Grid. I'm begginning to wonder what do you need a console for unless is for proprietary games. If I was a game devloper I would want my Game to be available in one formate. Right now that format is Nvidia Grid....All the cloud gaming services use it and apparently Sony has given a nod towhere they are headed.