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Opinion The Verge - How Sony bought, and squandered, the future of gaming

CyberPanda

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How Sony bought, and squandered, the future of gaming
PlayStation Now had the keys to the cloud gaming kingdom, but Sony barely stuck a toe in the door


Part of

PlayStation 25th anniversary issue

Stop me if you’ve heard this one before: a video game platform that lets you play games with the press of a button, no need for discs or downloads. Tap on a YouTube ad for a game, and you’re instantly playing in your web browser. Experience the latest and greatest games on your ancient laptop, phone, or tablet, thanks to remote servers instead of having to buy a console or build a powerful gaming PC. Fire up a game on the TV, then seamlessly pick it up on your mobile device. Stuck in a game? Ask a friend to take over your controller from across the internet.

If that sounds like the lofty pitch for Google’s Stadia cloud gaming service, you’ve been paying attention. But every single one of those things was promised years ago by a startup named Gaikai — a startup that Sony bought in 2012 for $380 million. At the time, Sony gave every indication that it would harness the full potential of a PlayStation cloud. It even bought Gaikai’s closest competitor, OnLive, in 2015 and launched a service called PlayStation Now that finally hit 1 million subscribers this October. But half a decade later, the company has barely tapped into cloud gaming’s promise, and competitors like Google seem poised to attract the gamers that Sony failed to convert.

I doubt it’s a coincidence that Google and Gaikai’s pitches sound so similar. As Gaikai co-founder, CEO, and former PlayStation Now chief David Perry pointed out to me in an interview on the day Stadia debuted, Google gaming boss Phil Harrison used to sit on Gaikai’s advisory board. Jack Buser, Stadia’s head of business development, used to run Sony’s PlayStation Now. Heck, a clean-shaven Sundar Pichai was the one who first introduced how Gaikai could stream games natively in the Chrome web browser, three years before he became Google’s CEO.


Mind you, Google is already having plenty of trouble meeting the lofty goals it cribbed from Gaikai, breaking many of the promises it made before launch. But how did Sony let Google become the front-runner in cloud gaming to begin with, after having the better part of a decade to freely build it out?

Let’s take a quick trip back to February 2013 when Sony introduced the PlayStation 4 and revealed Gaikai’s newfound role in the whole thing. When Perry strode onstage, he presented a vision of a PlayStation Network like we’d never seen before, one that would let you instantly try any game before you buy it. His words:
With the Gaikai cloud technology, our goal is to make free exploration possible for virtually any PlayStation 4 game in the PlayStation Store. Imagine you’re in the store, checking out the latest titles and you see something that catches your eye: no problem. You can simply press the X button to hop in and start playing the game. Now in the past, not all games were available, and the ones that were had to be kind of the ‘lite’ version, where they’d been edited down so they could be downloaded reasonably quickly. With Gaikai and the PlayStation Store, you’ll be able to instantly experience anything that you want. I’ve always liked that concept of try it for free, share it if you like it, and pay only for the games you fall in love with.
It’s easy to forget this was Gaikai’s pitch from the start: instant free demos of games you can try before you buy, using practically any device you own.
I got an exclusive first look at Gaikai in December 2010, and I’ll never forget what Perry asked me afterward: not whether the streaming quality was good, but if I’d experienced enough to figure out whether the game was worth buying. That was why Gaikai originally streamed games from YouTube and Facebook ads — they were legitimately ads! — though Gaikai was also willing to let publishers stand up their own servers and set their own pricing if gamers wanted to turn those ads into game time.
When I visited Gaikai’s headquarters in June 2012, I was amazed by how many endpoints Gaikai had already built. Both LG and Samsung TVs were slated to feature the service. It worked with an off-the-shelf Android tablet. Best Buy and Walmart had live game demos you could play on their websites, and you could share demos on Facebook with your friends and relatives they could play right inside the social network if you liked.
But Perry says most of that went out the window when he cashed Sony’s check. “After Sony acquired Gaikai, we went quiet. I stopped giving speeches, I stopped pushing this as the future of the industry ... We withdrew from all the deals,” he relates.

Though Perry says he’s loyal to Sony for buying Gaikai and eventually building a service with 1 million subscribers instead of just “shoving it somewhere in a drawer,” he says his personal opinion is that Sony didn’t really understand what to do with Gaikai, and the company started by trying to shoehorn Gaikai’s tech into a way to sell its own hardware.

“Sony acquired something that they thought would be a good idea to buy because they could feel the momentum, and I don’t think at the time it was clear to them which business they were in,” Perry says. “If you are in charge of PlayStation, are you in the hardware business or are you in the gameplay business? I don’t think that was clear. Because if you’re in the hardware business, this isn’t very interesting. If you’re the guys building hardware, and someone starts talking about the cloud, it’s just like, ‘Meh, we’ve got work to do.’”

And “meh” was definitely how I felt when Sony’s PlayStation Now cloud gaming service debuted. When an open beta launched in late 2014, it was ridiculed as the antiquated Blockbuster of video games: a service where you’d have to renteach PS3 title — and only PS3 titles — for more than you’d pay to buy a used disc at GameStop. It felt like an expensive way to cover for the fact that the PS4 wasn’t backwards compatible with PS3 games.
Sony later added a $20-a-month subscription service for a selection of less-desirable games alongside the rentals (it eventually ditched rentals altogether), and it expanded support to the PS3, PS Vita, PlayStation TV, a handful of Sony TVs and Blu-ray players, and even a few Samsung smart TVs.

But it took until late 2016 for Sony to finally let you play PlayStation games on a PC, and it was mid-2017 before it added a back catalog of current-gen PS4 titlesinstead of exclusively older games. And it was tough luck if you wanted to play those PS4 games on your Sony handheld or smart TV because Sony ditched every other platform, save PC and PS4, along the way. It was only this October that Sony finally dropped the price of PlayStation Now to a more reasonable $60 a year and deigned to add a few flagship games like God of War and Uncharted 4. But even those $20 “greatest hits” games will only be available to stream through January 2nd, 2020.

Even though Sony has finally stopped trying to use its PS4 Remote Play app to sell Sony smartphones, and it opened it up to iPhone and Android gamers (years after shutting down a perfectly good hack), there’s no parallel PlayStation Now mobile app in sight. Sony completely ceded the Gaikai / OnLive era idea of delivering cloud games directly to phones. That’s where Microsoft’s xCloud is now striking first and where Google and early Gaikai partner Nvidia may also have an opportunity.
There are reasons why Sony took it slow with Gaikai — they’re just unfortunate reasons — like how Sony’s initial PlayStation Now service relied on having actual PS3 hardware in the data center for every single player. That capped Sony’s physical and economic ability to expand the service as quickly as it might have liked. Or how the company wound up diverting its attention to VR.

“VR TOOK ALL THE AIR IN THE ROOM FOR A WHILE.”

“Cloud gaming is working. We’ve demonstrated it. We’re sort of waiting for things to get better and have more power in the cloud, faster internet speeds, all the rest of it ... And then VR comes out, and VR took all the air in the room for a while,” says Perry. He also points out that Sony never put much marketing behind PS Now or ran a real ad until last month. Sony also never wound up offering a bundle with its other subscription services like PlayStation Plus and PlayStation Vue, for that matter.

When I ask Perry what happened to the key part of his original vision — the idea that PS4 players would be able to instantly sample games for free — he admits that Sony never actually tried.

“It was something I was passionate about, but I don’t think it had the support of others,” says Perry, adding that he found it wasn’t necessarily compatible with “the harsh reality of business.” One example: he spoke to a publisher who told him, “David, we don’t want anyone to play our game.” When Perry asked why, he says they replied: “Because the trailer does a better job of convincing them our game is good. The game isn’t very good to be honest, but the trailer makes it look good.” It was a clarifying moment.

“WE DON’T WANT ANYONE TO PLAY OUR GAME.”

Even so, Perry says he believes gamers would “have to be insane not to sign up” for PlayStation Now at the new lower price, as long as they spend a lot of time gaming. “The amount of games you’re getting for the money is absurd.” But he also believes that Sony, Google, and other prospective cloud gaming providers need to stop trying to stick existing gaming components into their servers and convince publishers to build and share their best games instead of just a back catalog of titles. “They have to decide that this is the future.”

Perry’s somewhat worried that cloud gaming will adopt the same pattern we’re seeing with other streaming media today, where Disney and HBO and Apple and many more are all standing up their own video delivery services to compete with Netflix for our attention. “When things get out of control, you end up with multiple streaming services. And you want to watch Harry Potter, and you don’t know where it is,” he says. Sony had seven unchallenged years to convince publishers, but now Google, Electronic Arts, Ubisoft, Microsoft, Nintendo, Amazon, Verizon, Walmart, Nvidia, and others are all testing the waters for their own possible cloud gaming subscriptions.
None of this is to say Sony wasted those seven years or made the wrong decisions. The PlayStation 4 wound up becoming a phenomenal success. It’s the second best-selling console of all time having shipped over 102 million units, handily winning this console generation. PlayStation VR is also one of the best-selling console accessories ever, even if VR hasn’t taken off quite yet. And Sony did need to make some hard choices during the past decade to turn around its foundering business. This is the decade Sony decided it was no longer an electronics company, chopping off pieces of itself to survive.

Some of Gaikai’s know-how might have even been responsible for that success. In 2012, Gaikai showed me a demo where you could start playing a game while the rest of it downloads in the background — something that became a core feature of the PlayStation 4. Share Play, a feature that lets you see a friend’s screen from over the internet and then take over the controls, also eventually shipped. And even if Sony doesn’t become a front-runner in cloud gaming, buying Gaikai and OnLive early on means it has a lot of patents on the tech.

When I try it again for the first time in years, I have to admit PlayStation Now isn’t bad. I’m streaming God of War on my Windows desktop at a fairly lackluster 720p resolution, but with nary a hitch. There’s no way I’d spend $10 a month or $60 a year for that experience — not when I can own those same games permanently for $10 or less per disc — but I would pay if Sony gave me the latest games there. Better yet, I’d pay to get games that aren’t even possible on console, with hundreds or thousands of simultaneous players, incredibly advanced physics simulations, and AI-voiced NPCs that don’t just repeat the same pre-programmed lines of dialogue. It’s just not clear whether Sony has any intent to deliver those things — and now it’ll have to fight its own ideas in the hands of much wealthier adversaries like Google. All we know for now is that the PlayStation 5 is coming, and Sony has a vague interest in maximizing the “off-console opportunity” of cloud gaming as well.

In 2014, Perry claimed that Sony had “fully greenlit” a project where Gaikai would help build “the fastest global network ever made” to let gamers play like never before. That may still be the plan, but Sony’s going to need some help. That may be why it struck a cloud gaming partnership with Microsoft this May, teaming up with its chief rival.

Sony was one of the few companies that believed in cloud gaming enough to spend big in 2012, just as it was one of the few that believed in VR. But that wasn’t enough to make Sony a leader.

 
Nov 22, 2019
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Fact is, game streaming is just not ready. I tried PSNow and it was fine. It required me to cut the wifi and let my Playstation hog all the internet with a direct connection but what I got was playable enough for me to enjoy a couple games. The problem is, I can't just hog the internet all day to play a game. My girlfriend likes to play games on the computer when I play on the playstation. I like to check social media during load times. We both typically like to stream music while gaming. None of those things are possible when I have PSNow running, even with my 50mbps internet and no data cap (literally the best plan available where I live).

For a service that sells itself as freeing, it's one of the most cumbersome ways to play a game in it's current form and I've heard Stadia is really no different. I just don't think the future of gaming is streaming and relinquishing all ownership. It can work in a Netflix fashion, that's why I think PSNow is the best streaming offered currently, even with it's lackluster resolutions and framerates; and it can be supplementary to how you currently play games but it's not the future of anything. The optimal way to play will most likely always be on a local device.
 
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kurisu_1974

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Isn't there a difference between a platform that just streams existing games like PS Now and Stadia, which is supposed to be it's own thing, where there's supposed to be games developed for Stadia that take advantage of the cloud infrastructure they run on (like massive online worlds without instances).
 

Bryank75

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Streaming will never be the future. The tech is too limited and cannot ever do what local hardware can right now....

Streaming is just a corporate / EA / Bethesda / MS type of wet-dream to screw over gamers and perpetually charge people for access to what used to be theirs.

With the huge digital back catalogs coming forward, why would anyone start over again or pay for access to games like they are too poor to own them?
 
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Clear

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How can you squander something despite running it as a sideline to the dominant console platform of its gen?
Especially when we're yet to see a competitor make a bigger success of it than them!

Stadia launch has been a debacle, and XCloud is still in Beta, meanwhile PSNow has been quietly ticking along with Sony's other forward looking initiatives like VR. Sony have years of sales metrics, and they are in a far better place to judge demand than their competition.

I find it kinda funny that they kind of handwave off that Sony did try and expand out onto other devices, but pulled back when demand wasn't there. Because lets face it, they wouldn't have done that if it was such a goldmine of a market like they are currently hyping it as being.

At the end of the day Sony may have kept their streaming efforts low-key, but they have steadily worked to improve and expand it over the years, all the while maintaining a highly successful main business in the PSN ecosystem - which of course is where the majority of their profits come from.
 

Bolivar687

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The problem is pricing. Sony probably has enough data to conclude that their entire ongoing successful business model would collapse if they priced this too appealingly.
 
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Salvatron

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"...and competitors like Google seem poised to attract the gamers that Sony failed to convert. "
Oh, do they now?

"“Cloud gaming is working. We’ve demonstrated it. We’re sort of waiting for things to get better and have more power in the cloud, faster internet speeds, all the rest of it ... "
Oh, is it now?

:messenger_neutral:
 
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Punished Miku

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I still think MS in the lead honestly on this front. Gamepass is much more attractive than Stadia. All new exclusives day one.

Can't you also download games?

It's not even close. You have to buy each game on Stadia.

MS will likely add in the same functionality to play on a browser later.
 
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Jan 21, 2019
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I still think MS in the lead honestly on this front. Gamepass is much more attractive than Stadia. All new exclusives day one.

Can't you also download games?

It's not even close. You have to buy each game on Stadia.

MS will likely add in the same functionality to play on a browser later.

You can play your game library, so as you buy games they become available on xCloud. If Exclusive you can download them to Xbox, PC or Stream from the cloud. You can also stream GamePass as well.

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Jigsaah

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I still think MS in the lead honestly on this front. Gamepass is much more attractive than Stadia. All new exclusives day one.

Can't you also download games?

It's not even close. You have to buy each game on Stadia.

MS will likely add in the same functionality to play on a browser later.
Game Pass and Stadia are kinda 2 different beasts. Unless you were meaning xcloud, then yes Xcloud far better than Stadia on many fronts, especially considering Xcloud is still in Beta.
 
Apr 19, 2019
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I don't get it?

  • Sony came in to this generation 'Doomed', according the media.
  • They were bankrupt and had to sell a building, more proof of being doomed
  • Had a more powerful, less expensive, customer-friendly console
  • Launched console VR in the early days while still wondering if they would make it through the gen.
  • Released more exclusives than anyone else
  • Launched a re-vamp of their breadwinner title; God of War, in the midst of EA et al saying single player games were dead
  • The first company to launch a 'pro' version in the history of consoles.
Yet,

  • Microsoft stumbled out of the gate and have released a pitiful amount of exclusives
  • Microsoft had to launch a new console and call it the Xbox One X (even though it's only an Xbox One in CPU alone)
  • Nintendo messed up with the Wii U and have only got back on their feet thanks to the Switch
  • Google Stadia is, well, very short of the mark on what Google promised.
and Sony have squandered the future?

No matter what you say, think or feel about Sony, there is very little doubt that the PS5 won't be the front-runner again.
 

diffusionx

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Sony squandered nothing; they have spent the past five years running this service and trying to make it work. And I think they’ve shown how hard it is and how it is not in fact the future of gaming. If it was then the PS5 would be a little streaming cube like a Roku.

The Verge has spent its entire life shilling for Google’s bullshit, so it doesn’t surprise me that they are proclaiming streaming to be the future now.
 
Jan 21, 2019
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Sony squandered nothing; they have spent the past five years running this service and trying to make it work. And I think they’ve shown how hard it is and how it is not in fact the future of gaming. If it was then the PS5 would be a little streaming cube like a Roku.

The Verge has spent its entire life shilling for Google’s bullshit, so it doesn’t surprise me that they are proclaiming streaming to be the future now.
Just because Sony is failing at streaming today does not mean the partnership with Microsoft will allow them to fail in the future. MicrosoftIs doing all the work for them to ensure a great product for them.

Streaming is not the future of gaming but it is a part of it. I’m on board because I would like to play the games that I buy anywhere I want and I should not be limited. But I still want to console and I still want to PC.
 
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FranXico

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MicrosoftIs doing all the work for them to ensure a great product for them.
 

Trogdor1123

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Is ps now the number one streaming service by a country mile. Sorry if I missed it in the long text
 

Grinchy

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I don't get it?

  • Sony came in to this generation 'Doomed', according the media.
  • They were bankrupt and had to sell a building, more proof of being doomed
  • Had a more powerful, less expensive, customer-friendly console
  • Launched console VR in the early days while still wondering if they would make it through the gen.
  • Released more exclusives than anyone else
  • Launched a re-vamp of their breadwinner title; God of War, in the midst of EA et al saying single player games were dead
  • The first company to launch a 'pro' version in the history of consoles.
Yet,

  • Microsoft stumbled out of the gate and have released a pitiful amount of exclusives
  • Microsoft had to launch a new console and call it the Xbox One X (even though it's only an Xbox One in CPU alone)
  • Nintendo messed up with the Wii U and have only got back on their feet thanks to the Switch
  • Google Stadia is, well, very short of the mark on what Google promised.
and Sony have squandered the future?

No matter what you say, think or feel about Sony, there is very little doubt that the PS5 won't be the front-runner again.
It's the popular club problem. The people who were waved in are having a great time inside taking body shots off of models. The people who are outside have to create a hatred for the party taking place inside to justify not being able to go inside.
 

FranXico

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Yes, their collaboration is known. It's just the narrative that they cannot do anything without MS that is ridiculous.

And it is also very likely that they were also looking into a strategic alliance against Google. They probably heard about Stadia long before anything was announced.
 
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diffusionx

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Just because Sony is failing at streaming today does not mean the partnership with Microsoft will allow them to fail in the future. MicrosoftIs doing all the work for them to ensure a great product for them.

Haha no. First of all, Sony hasn't failed. They have a viable service. It has flaws, but it has the same flaws Stadia and xCloud have. Those flaws are insurmountable in many ways. Microsoft is not some magic wizard company that will do all the work while stupid Sony bumbles.

People seem to think streaming will become this flawless thing with enough time or with enough effort. It won't. The people setting up these services are hoping people will accept a worse service in exchange for more convenience. It's not a bad bet, as people exchanged CDs for mp3s for Spotify, and Blu-Ray for Netflix, accepting a tech downgrade each time. We just don't know if they will make the same choice for gaming ,but it will be offered.
 
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Jan 21, 2019
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Yes, their collaboration is known. It's just the narrative that they cannot do anything without MS that is ridiculous.

And it is also very likely that they were also looking into a strategic alliance against Google. They probably heard about Stadia long before anything was announced.
MS has the servers and the technology, Sony does not. It’s not a shot at Sony, this is a smart move for them. It would also be wise to move there PSN services over to them for dedicated servers as well. Microsoft has invested a lot into making them nothing short of amazing.

Haha no. First of all, Sony hasn't failed. They have a viable service. It has flaws, but it has the same flaws Stadia and xCloud have. Those flaws are insurmountable in many ways. Microsoft is not some magic wizard company that will do all the work while stupid Sony bumbles.

People seem to think streaming will become this flawless thing with enough time or with enough effort. It won't. The people setting up these services are hoping people will accept a worse service in exchange for more convenience. It's not a bad bet, as people exchanged CDs for mp3s for Spotify, and Blu-Ray for Netflix, accepting a tech downgrade each time. We just don't know if they will make the same choice for gaming ,but it will be offered.

Microsoft has resources Sony doesn’t. Right now Sony is limited to 720p and that is a fail. Microsoft will help bring them into the present with more data centers in more places to allow Sony to have a better experience for its users.
 
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FranXico

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MS has the servers and the technology, Sony does not. It’s not a shot at Sony, this is a smart move for them. It would also be wise to move there PSN services over to them for dedicated servers as well. Microsoft has invested a lot into making them nothing short of amazing.
Sony is still using a lot of different providers to ensure coverage, and Azure is one of the best ones (MS invested in it over many years as well). We don't know enough details to know if Sony would really put all their eggs in the Azure basket.
 

Klayzer

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Sony is still using a lot of different providers to ensure coverage, and Azure is one of the best ones (MS invested in it over many years as well). We don't know enough details to know if Sony would really put all their eggs in the Azure basket.
Curious why some think Microsoft will be the only provider to Sony for that type of service. I can't see Sony locking themselves to one provider for all their needs. Sounds more like team MS wishful thinking.
 

thelastword

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This article is a strange one...….

They have declared PSNOW not to be the streaming leader, and I'm getting the vibe that they crown Stadia as the new streaming leader......That's a bit bonkers because we have no data on Stadia's success, yet the pink elephant is in the room dancing and it says "Stadia did not have the greatest launch"......So how does he quantify who the leader of streaming is atm...?

BTW, Sony did the right thing to prioritize PS4 hardware and VR hardware and software over streaming this gen...........As he said, they have lots of patents and experience in the tech, they already have a plan to build the fastest streaming network.....Sony only has to ensure it's viable and it's the right time when they step on the gas......I still feel PS5 hardware and PSVR 2.0 should be their priority next gen and by all indications it's what I'm seeing they are focused on still.......They will expand PSNOW no doubt and I think it will be better than Stadia's offering when they revitalize it..........Stadia will not beat Sony on exclusive offerings with streaming....At least if people want prisitine 4k 60fps, they have a PS5 box for that, whilst Stadia does not.......

The worse thing for an article to do is to praise something or candidates where all the chips have not fallen down yet......In that respect, it sounds more like an ad or a campaign rather than a well researched, by the numbers pieces......but I guess this is the high standard of gaming journalism these days..... :messenger_smirking:
 
Jan 29, 2019
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Lost me at "the future of gaming."
The future starts right after now, all the time, so in a sense they aren't wrong.

Games journalists had some predictions about the future of gaming back in 2013 - that involved always online, xbox one features, etc., there were so many fluff pieces about the xbox one, it was pathetic to watch and I have not paid much attention to these people since then as what they are pushing doesn't talk to me, anyway, in the end nobody wanted this. Now they are trying to push Microsoft's (or Silicon Valley's) vision/narrative again... the question, will they be right this time around? So far Sony is the only established streaming service (in the sense that they have a sizable user base for PSNow), so assuming that they invest in some upgrade of their legacy hardware.

Also, comparing PS Now's 720p streaming resolution is pretty disingenuous, they ignore (probably willfully) that if you own a PS4/PRO you can download the games made for your system and play them locally, which is WAY better than what any streaming service can offer in therm of image quality, even on games that run at 1080p, no compression makes a pretty big difference.
 

diffusionx

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Microsoft has resources Sony doesn’t. Right now Sony is limited to 720p and that is a fail. Microsoft will help bring them into the present with more data centers in more places to allow Sony to have a better experience for its users.

Correct me if I am wrong but virtually every PS3 game runs at 720p. So streaming at 720p is not a problem. And if you're using Now on the PS4 you can download and run PS4 games natively so that is not a problem either.

You realize that Now is probably running on AWS right now right? Companies are not running these grids themselves these days. They signed a deal for Azure with MS. Azure has built in tools for streaming, as does AWS. MS is improving those tools all the time, as is Amazon and as is Google. It's how all these companies with cloud services work.
 
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JustP_Gaming

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Sony is still using a lot of different providers to ensure coverage, and Azure is one of the best ones (MS invested in it over many years as well). We don't know enough details to know if Sony would really put all their eggs in the Azure basket.
Stop speculating and base your opinions off the facts that have been presented.
 

Moochi

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This article is dumb because it makes the assumption that creating a streaming service for video games was a good idea with huge market appeal. That isn't true in 2020, much less 2012-2019. Maybe once we have low-ping, low-orbit satellite connections for everyone in the world, but the infrastructure for cloud-based gaming does not exist in America, which is the largest consumer of video games.
 
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Thanks to the internet and social media, theres way more negativity going around than ever before. As a gamer, a guy that was with PS since day one, I have very fond memories and really have a connection to the brand. Sure, they made some weird decisions but if you look at it as a whole, its been a beautiful trip and still going strong. Im sure its the same with a Nintendo or Xbox fan. Todays media puts everything under the microscope and wants to just criticize. Did I hate the random censorship PS does on some games all of a sudden? Absolutely but as a whole, its been amazing 25 years.