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Dave Perry on the innovation of Gaikai
All of the questions about Gaikai and OnLive have revolved around whether the streaming technology actually works. Can a company actually process your games on a remote server, and then stream them to you in a playable format? For Gaikai's CEO Dave Perry, there's no question: It works. "Yeah. Yeah," he says. "Absolutely. No problem at all." The question that Gaikai is trying to answer, then, isn't about whether the cloud works, but how. OnLive has launched with a subscription model, but Perry's doing it differently. Rather than build a service for customers, he wants Gaikai to serve as a sort of distributor -- a go-between for game publishers (like EA and Activision), online content creators (like Joystiq), and game players. Gaikai's "secret sauce" isn't in the streaming technology itself, but in the business model that makes it possible and profitable for everyone. Perry explained his plan to us in detail at the company's headquarters in Southern California last week, and told us why and how Gaikai is different from all of the other streaming services out there.
Publishers expected to have slow 2007
A number of gaming companies have had decent 2006 performances. Ubisoft (EPA:UBI) is beginning to reverse their losing trend as is Infogrames (EPA:IFG); companies like THQ (THQI) are doing well and even GameStop (GME) is enjoying the success the publishing houses are. However, some analysts believe that this is going to be a temporary boost and publishers are going to have a weaker 2007. DFC Intelligence has stated that 2007 will be a weaker year for game publishers (which contrasts other expectations). This decline is mainly because of the reduction of PS2 desirability as the system will be replaced by the next three consoles as well as a additive effect of third party publishers having had historically poor sales on Nintendo platforms. The hardest to be hit are expected to be Electronic Arts (ERTS) and Take Two (TTWO) as they are too heavily invested in Sony systems (one being in poor supply and the other expected to have declining software sales). The trend is, however, just part of the console cycle. The year after the new batch of consoles launches has shown to be bad for the game creators. Current gen levels are still low and developers are cutting back on last-gen software development, giving the existing install base little to play. However, with major releases at the end of 2007 like Halo 3 and Final Fantasy XIII (which, ironically, are sequels of the titles that launched in 2001, the end of the second year after the PS2 launched), the slump will likely end there ... that is if poor third party success on a Nintendo console since the N64 doesn't persist.
