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Above the Clouds

Mon 23 Jan 2012 8:00am GMT / 3:00am EST / 12:00am PST
Business

Gaikai's Dave Perry on Facebook, new consoles and making games the most valuable form of entertainment

At least week's Cloud Gaming Europe conference, Gaikai's David Perry delivered an upbeat keynote on why reducing friction between the player and the game is essential to finding new audiences for games. That's the philosophy at the heart of cloud gaming - one click and you're in, running high-end games on any device. No compatibility problems, no waiting time. And Gaikai is delivering that, not only to the hardcore gamer, but to anyone that with a Facebook account, to anyone looking for hilarious cat videos on YouTube, to anyone checking out deals at Best Buy. One click, and you're playing Crysis.

In this exclusive interview with GamesIndustry.biz, Perry expands on the Facebook deal and details for the first time plans to stream full games over the cloud, where the company goes after that, why console manufacturers cannot afford to ignore cloud gaming and how to make video games the most valuable form of entertainment.

Q: Can you begin with some more details on the Facebook deal, because I remember Nanea Reeves talking about this way back at E3 last year. She showed me World of Warcraft running in Facebook but it was all very hush-hush.

David Perry: Our problem as a company is that we have a lot of things on and we have to look at our production pipeline and try and work out in what order this is coming. Everyone wants everything right now. That's the problem with this cloud gaming thing, it's hot. And because it's hot, whatever a company's interest is, they want it right now. Some things become immovable. Like CES. I can't move CES, it's going to happen. Last year we said we wanted to show Gaikai on digital televisions, we were really going to do it. And we didn't want to do it behind closed doors, we wanted to do it on the show floor so it has to be fully playable by anyone that walks up. And LG asked us if there was any way we could make it 3D because the whole booth is displaying 3D. Our guys were already pretty tired but they pulled it off so we had all games running in stereo 3D playable.

Now the dust has settled on that we've switched the focus to running on Facebook. We've had Facebook working for some time but to be very clear is it's not some sort of weak version of it. It's truly embedded in Facebook in the canvas page, fully integrated with all of the social features in real time. That integration with Facebook is starting to deliver on the whole vision of Gaikai much more clearly. I don't believe the games industry will ever be number one unless we can improve our accessibility. We're always going to be dragging behind movies and music. If we could get as equal, meaning as accessible everywhere, games generally would make more money. People have this interesting relationship - there are people who continue to spend a lot of money on something like World of Warcraft. You pay a monthly fee to have access to one single video game. You can choose the best movie in history, the most successful, but would you pay $16 a month to have access to it? Not in a million years. There's something special about games that somehow makes it acceptable to spend more money on them. Therefore, the theory being, if we could get as accessible as movies and music, because of the way monetisation works, games could become the most valuable form of entertainment. Games even make money from trying to make you play them faster. In Farmville people pay to develop faster. Would you ever pay to speed up a movie or a song?

I don't want to take your console from your cold dead hands, that's not the case at all. You're going to continue to play the way you play.

Q: Pay to see the big conclusion of a thriller like the Usual Suspects... you're paying to avoid the content of the game.

David Perry: It's the most ridiculous thing. It's such a special, lucky situation that we have. And the second thing is that piracy is so easy for movies and music but for internet connected online multiplayer games it's not. How lucky are we where we're in an industry where users pay more and piracy struggles to hamper online games - which is the way everything is going. And we're sitting there and the only thing that's blocking us is that everything is such a pain to get running. When you give them something that's not a pain, like Farmville, it's so easy to get up and running, and you get 100 million people playing. It's the same with Angry Birds. If you had to click on 40 different things to get it running, fill out forms, type in your mother's maiden name and all the rest of it, it wouldn't have had anything like the success its had. That's why Apple's been so successful.

Q: It's all about accessibility. What you've done is took Gaikai to where the consumers are, games sites, publishers, retailers, social networks. I've read comments where people say "why would I want to play Warcraft on Facebook?" But it's not about those people, it's about people on Facebook that have never played Warcraft before.

David Perry: It's not aimed at them at all! It's for the people that have heard of something called World of Warcraft and think "what is that?" The barrier for them is they're 40 minutes from playing it, from downloading the trial, the clicks, the forms to fill in... they don't want to know what it is that badly. But if they're one click away from it, and they keep seeing that offer, at some point they are going to give it a try. The truth with these games is once you kill that first enemy, you realise it's pretty cool. Whatever the game is, an MMO or action game, just put them in front of the player. Why isn't EA's FIFA game on FIFA.com? There's people visiting that site that don't have consoles and have never bought one but that's your specific customer right there. We're not targeting those that have a PlayStation and have bought the game before. We're targeting football fans. The industry needs to grow. All those people out there who already buy the games are already hardcore gamers and they'll continue to buy the game but we want to keep on growing. The more money that comes into a publisher the more money they can put on the next game and the more they'll bet on the next game. Because of the new paradigms of distribution and devices, imagine if there were five times the amount of people playing your games. Five times the amount of money, five times the investment into your next game. It's a win for everyone.

Q: So with Facebook, YouTube, Best Buy and all the others, how many people is your technology in front of?

David Perry: If you give me your game today I can put your game in front of more than 100 million people, easily. Quite honestly if we put you on the homepage of YouTube right now on it's own, you're already hitting that number. To some extent we've achieved our goal but we wanted to achieve it in the purest sense. We wanted to have a lot of sites running Gaikai, we have 300 in the pipe right now. Our first were strategically important, like Eurogamer, we were on-boarding the sites that we thought were going to move the needle. With Facebook, with YouTube, we can do Google + just as easily, if you combine them it's an enormous reach.

Q: There's seems to be a fair few companies that are stepping up to claim a place in cloud gaming, companies that seem to have been working on similar technology for some time. Would you expect to see mergers and acquisitions in the near future, or are there really only a small number that are actually delivering true 'cloud gaming' as opposed to download and digital distribution companies?

David Perry: I got asked a question just recently, "why would anyone use Gaikai when there's ten other companies?" What are you talking about? There's this confusion about what cloud gaming is. It's a simple meaning, your game runs in the cloud. If you go by that concept you've then cut out 80 per cent of the room. And then to be a real cloud gaming company you must have a real cloud gaming network, a global network of servers to run it. Because if you don't you're not a cloud gaming company, you're a tech demo or something. If you use that as a basic definition you've narrowed it down to two companies, Gaikai and OnLive. That's a global network that runs games on the cloud. The second kind of company is actually just downloading games that have content delivery networks [CDN] delivering data. That doesn't sound sexy at all and they call themselves cloud gaming even though it's not. My definition there is cloud delivery.

Q: I wonder where you go with this next. Once Gaikai is fully integrated into Facebook, the biggest social network there is, where do you go from there?

There's something special about games that makes it acceptable to spend more money on them. If we could get as accessible as movies and music, games could become the most valuable form of entertainment.

David Perry: Step two is continued streaming, allowing full games to play. Step one was trials, step two is full games. And then full games will be unlocked across the whole network so all retailers will be able to do full games. And then step three is tablets. Our tablets are looking like some of the most exciting things we are doing.

Q: But Gaikai works on tablets already, right? You can access games already?

David Perry: Not the way we'd like you to. We can run 60 frames per second on an Android tablet and when you see that, knowing that hardware is better than a PlayStation 3 or an Xbox because those are six year old devices and you're looking at a game with those levels of graphics, really tight, that's the moment where you can see where this is going... I love the fact I get to see this stuff, I get to see what's coming. I have played Crysis at my house with an 8 millisecond ping to a data centre at 60 frames per second. I had an epiphany. If you think about digital televisions, you're plugging in your Xbox to that and those TVs will add 70-100 milliseconds of latency because they were never built for speed. If you're watching TV with a 100 millisecond lag it doesn't matter. But because we're working directly with the manufacturers of TVs, in 2013 when they make the new model you can bet your bottom dollar we're going to push for a direct connection from the Ethernet port to the screen. So we can get instantaneously from that port to the screen without going through any of the filters and all the rest of the stuff they've got in there. We went for a very dense server network, OnLive went for three, we went for 24. If I'm in London I'm 5 milliseconds from a data centre because we have severs in London. OnLive is in Luxembourg, so in London we win. That religious focus on the speed of the connections has been absolutely critical to our strategy. The money is in the high-end games. I agree with the long-tail, but it's a blockbuster driven industry whether we like it or not.

Q: When would you anticipate full streaming of games will go live?

David Perry: My guess is about three months from when Facebook launches, about 90 days from that. I'm not aware of any technical hurdles we have that would stop it. But there's a very big difference between the way we're doing it and the way OnLive is doing it. They have to modify the game, they have to get the source code to the game. Gaikai doesn't require modification of the game. To give you an example The Witcher II was given to us and them at the same time. We went live with Witcher II immediately and now four or five months later they still don't have that live, and that's because they have to touch the code. The whole structure of Gaikai is about not touching the code. When we show World of Warcraft it's the real thing, it's not like we had to go and tweak it to get it to work. That means that every game in history remains compatible with our solution. We can create really cool retro services. And you've seen emulators of the original Mario Kart on Gaikai, it's effortless.

Q: At CES this year Nanea Reeves said that she thinks one of the hardware manufacturers won't take part in the next round of console development. Is that something you believe as well?

David Perry: My take on it is very simple. I believe the console manufacturers will stop calling them consoles on the next cycle and they'll be media devices. But there's a lot of companies already doing that. There's lots if different media devices that are adding multiple services and if those devices add cloud gaming you're going to see great gaming, the best gaming brands in the world, appearing on those devices too. It's going to become confusing to a consumer. When it's clearly defined as a gaming box and it's just a gaming box and the price is as low as it can be it's nice and clean and we understand that. But it's not that simple anymore, it's more and more complex and the more they push into the media space they're going to have a lot more competition. I cannot see a future where I want to keep dealing with those. Imagine there was a Netflix box - I don't want one. Just put it in the TV. Give me an Apple TV with it built in. I just can't see a future where you're going to want to pay for a box that's half the price of a TV again that sits on the table in front of the TV when it can be embedded in and cost a lot less. This isn't about cloud gaming, this is about strategy of "what are you?" in the perception of the users. I see one more cycle and then they start to become something else. They become part of the entertainment ecosystem.

Q: There seems to be an expectation that the next consoles from Sony and Microsoft will rely heavily on a cloud gaming element.

You do not want to be the console that can't do cloud gaming. You do not want to be the retail website that doesn't have playable games on it.

David Perry: You do not want to be the console that can't do this. You do not want to be the retail website that doesn't have playable games on it. You don't want to be the gaming website that you can't buy a game from. It's not that big a bet and you're safer. I don't think they would avoid it. I like to look at the stats - at Cloud Gaming Europe there were six attendees from Microsoft, two from Sony and zero from Nintendo. That's a snap shot of who's paying attention. Overall it's unavoidable. They've got to take it seriously because it's better for consumers. I would play a lot more games if I fired up my Xbox, clicked on a game and it started playing straight away. I don't want to take your console from your cold dead hands, that's not the case at all. You're going to continue to play the way you play, but just imagine that you could have an opinion on all games because you've been able to try all of them. Each evening, flick through four or five games that just came out.

What's occurred here is we've ended up convincing the publishers to make their games free-to-play and that's a big step. Now with Gaikai you can try every game for free. You don't have to go through the pain of buying it. Try if for free, share it with your friends and if you love it, pay some money for it. And it's up to publishers to come up with different pricing paradigms because there's not so many mouths to feed. You don't have to deal with distribution, warehouse, boxes and manufacturing, it's all gone. There's that argument that people want to own physical products, hold them and touch them. I'm one of those people, I still have laser discs in my house. But the problem is this isn't the way the world is going. Facebook has hundreds of millions of people playing games where they don't have a copy of the game, they don't have a save of the game, nothing to back up. It's not your data! This is something that's already happened, we're not taking away the physical ownership of goods. Hundreds and hundreds of millions of people are doing it this way with Spotify, with Netflix. We've changed our relationship to data and I don't feel like it's a loss, it's a gain. Gaming is going to get there too, with a Spotify for games. Instant access to all games. We're running a platform, if someone wants to do Spotify for games they can do it on the Gaikai platform.

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