Will cloud games end the next generation of video game hosts?

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The game hosts currently in service are a bit outdated in terms of performance, and there are indications that the Xbox or PlayStation will launch a new generation of hosts as early as the end of 2013. But in the past one months, something interesting has happened that may change the host's view of its hardware and software services strategy: Sony bought Cloud gaming company Gaikai for 380 million dollars.

Sony's acquisition could herald future developments in the industry. Gaikai offers 40 online popular video games based on cloud services and does not require any form of hardware support. Earlier reports suggested that the PlayStation game would expand to other platforms and that the assumption became feasible, including mobile phones, tablets and other terminals that would create a "PlayStation ubiquitous" form of service. But I think the takeover could have a more dramatic impact on Sony's next-generation console platform.

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Historically, console manufacturers have relied on razor/blade marketing to sell game systems: to fill the cost of hardware losses through a long charge of licensing fees for selling games. In the old system, they need to invest heavily in more powerful hardware systems to meet their customers ' demands for increasingly sophisticated gaming operations, which means spending a lot of money on more powerful CPU,GPU, and hoping that the cost of hardware will decrease over time, Because the manufacturing process reaches a certain scale, it will reduce the cost of components over time. Generally speaking, this is the general trend.

But is it possible for these companies to stop dealing with these hardware issues and shift these burdens to the clouds? To be honest, moving the game to the cloud is not revolutionary, because there are already companies working on it. Like Gaikai, as well as onlive, they provide games in the cloud, and you can experience games on PCs, mobile phones and streaming media boxes worth 99 of us knives. It also plans to provide more service support for connecting TVs and other devices.

This 99-blade game box attracts me, and it's a model worth thinking about for Microsoft and Sony, for their next-generation game consoles.

What are the problems with cloud games?

A handful of people objected to the network-run device without independent computing power. One of the biggest voices is that humanities will reduce hardware sales in the short term, but it ignores the fact that most hardware devices are sold at a loss. No one has benefited from the first few years of the new hardware sale. Providing such a device with proper connection performance and screen rendering capability, and giving the appropriate cheap price, will be a more profitable direction. This would be more effective than making a high-performance device worth 299 of US knives.

The biggest problem with cloud gaming is that there is no infrastructure network to support it. We have to contend that a large number of players, even if they agree with Xbox Live, are connected through the DSL network, which may not meet the requirements of the HD game provider.

Most importantly, no one can prove that a cloud-based game can work in real-world situations with large numbers of users. OnLive has a total of millions of users, but that only reaches the number of users at the Xbox Live daily Peak. Providing computing power that is sufficient to support millions of of players running simultaneously is a big problem. For Gaikai's takeover, Microsoft is actually more appropriate than Sony because the software giant has built a huge virtual computing platform based on Microsoft Azure cloud computing. For Sony, it means investing heavily in hardware infrastructure to support cloud gaming.

And eventually, there will be potential costs to be passed on to consumers, such as Internet providers starting to introduce a cascade of bandwidth charges (influenced by China's electricity tariffs) that will add to the consumer's bandwidth burden. Because the game will be spread in high-definition data, for many casual gamers this means a huge monthly broadband fee. But no one, including Sony and Microsoft, wants to offer their customers a service that will bring huge bills.

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Original excerpt from techcrunch.com author Ryan Lawler