Cloud-based game streaming service Gaikai is reportedly looking for possible buyers, and expects to sell itself for well over $500 million.
Gaikai, along with OnLive, is one of the biggest players in the burgeoning cloud gaming market. Various publishers and even Sony have previously predicted that game streaming will play a huge role in the industry's future, as it allows consumers to play titles almost immediately without installation.
The Orange County-headquartered company has already hired bankers to manage the potential sale, according to business magazine Fortune. Since going into business in 2008, Gaikai has raised around $45 million from investors.
Leading up to E3 earlier this month, reports emerged that Sony would reveal its acquisition of Gaikai, but no such announcement was made at the event. Gaikai declined to comment on those rumors to Gamasutra, though it did announce a partnership with major TV manufacturer Samsung at E3.
The company's CEO David Perry told Gamasutra at the time, "We've talked to all of [the console makers]. Literally all of them. I wouldn't want to be a console without cloud gaming. Let's put it that way. I think that all of them are going to need this technology."
There are over a dozen companies offering directly competitive technology so any sensible buyer would be valuing a Gaikai or Onlive on its customer base and the earnings potential that represents not the technology. Is Gaikai's customer base worth $500m? Hmm...
The catch with streaming services is that they need users, but to get users you have to have content but to get content you need users to prove to the developers they can make a return. So it's a catch-22. To break out of that they either need to create their own killer content or provide a subsidy to the developers to support the streaming services or get your device pre-packaged into every TV creating mass adoption..
Onlive is doing it organically and will probably hit mass adoption in a few years as TVs have this technology built in. Hopefully we see more competition in the marketspace to keep things moving.
Onlive is doing it organically and will probably hit mass adoption in a few years as TVs have this technology built in. Hopefully we see more competition in the marketspace to keep things moving.