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Gaikai won’t partner with Sony for PlayStation 3 cloud gaming, but OnLive might

There was a brief moment during Sony’s E3 2012 press conference that it seemed the company was all ready to announce its acquisition of a streaming gaming company like Gaikai or OnLive. The company teased how it was always considering the future of how games would be played, and suddenly it seemed that all the rumors would turn out to be true. Then it announced Wonderbook and Book of Spells. Interactive Harry Potter is not quite as revelatory as a streaming gaming service for a console with 64 million in total sales.

Gaikai put the kibosh on those rumors almost at the same time as Sony’s press conference though, telling Eurogamer that no deal with the company was in place. “No,” said Gaikai head David Perry.

“I honestly can’t think of a future for the console companies that don’t include cloud gaming at some point. They can hold out as long as they want to, but at some point, you don’t want to be the console that can’t do this,” said Perry, “I’ve been meeting with them constantly, evangelizing how far we’ve come. Let’s just say they’re listening, and always have been.”

What about Gaikai’s main competitor OnLive though? Is it the company that Sony was said to be talking with ahead of E3? Eurogamer spoke with OnLive U.K.’s general manager Bruce Grove at the conference and while he didn’t confirm a future partnership with Sony, he certainly didn’t deny it.

“I can’t comment other than to say we talk to pretty much everyone,” said Grove, “I can’t tell you the details of the conversations. It’s one of those things where, I can’t even remember what the term is—there’s ‘frenemies.’ For the platforms that are already there, it’s important to not—in their world, in their view—cannibalize their existing business.”

Grove’s point of course is that Sony, as well as its competitors at Microsoft and Nintendo, rely too closely on retailers like Walmart, GameStop, Best Buy, and Amazon to fully embrace streaming video games at this point in time. With the majority of video game revenue coming from sales of physical media on discs and cartridges still, not to mention through privately held online distribution channels like XBLA, PSN, and the eShop, the console holders can’t afford to embrace a full streaming, cloud-based service at this point.

Eventually they will have to though. In the same way that Netflix’s success (and failure) has shown that the future of premium television services are on demand streaming, video games will eventually have to overcome the need for consumers to constantly purchase new hardware. It won’t happen tomorrow though. As Gaikai’s Perry said, “I want to be very clear. I don’t think physical media is going to go away really quickly.”

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