To publish or not to publish - that's the dilemma facing journalists presented with red-hot rumours, seemingly on a daily basis. On the one hand there are semi-plausible stories that a journalist would seek to double-source before publishing to ensure accuracy. On the other, there are the much rarer tips that come from such an established source that you can feel confident in publishing based on their reputation alone. What we can say is that the news that Sony is looking to stream gameplay via a cloud-based system counts as one of the latter: we understand that this is real and it is happening, but beyond that, the full details of the deal have yet to be revealed and may well surprise us all.
"The mass market has spoken: convenience is of more value than fidelity. It's simply a matter of when - not if - games will follow suit"
VG247 ran this story first, suggesting that cloud games will be streamed on PlayStation systems and that there will be an announcement at E3 - our understanding is that the timing is far from certain, but it remains an option.
Only a fool would suggest that streaming won't factor into the plans of both Sony and Microsoft during the next-gen period. MP3 has supplanted the CD, Netflix and other streaming video outlets produce more revenue than DVD and Blu-ray - the mass market has spoken: convenience is of more value than fidelity. That being the case, it's simply a matter of when - not if - games will follow suit.
A console/cloud tie-up obviously makes a lot of sense, especially for a company like Sony. The console business model is financially crippling and fraught with risk - and in the PlayStation 3, the company has lost an enormous amount of money. Not only are there colossal R&D costs in making a technologically advanced games console, but the platform holders (initially, at least) need to sell these machines at a substantial loss in order to grab a large audience quickly. The hope is that license fees paid on every game sold will eventually recoup the loss, certainly until production costs on the console drop enough for the manufacturer to start turning a profit on them.
The attraction of the cloud is therefore obvious: partner up with a company that already has the server infrastructure and costs fall through the floor, plus there's the added benefit that no expensive hardware is required client-side.
Smartphone and tablet owners already have the necessary video decoders built into their hardware - and so does PlayStation Vita. Sony could even roll the service out to PlayStation-certified devices with little effort, thus making the fledgling mobile platform somewhat more relevant than it is now. For those that don't own any of these decoding devices, just about every new HDTV will soon have the same technology incorporated as standard (HD video transmissions use a very similar compression format). Failing that, an OnLive microconsole-style box can be cheaply manufactured to get the job done. Once the decoding hardware is in the hands of the consumer, they need never upgrade again.
Even with all of these advantages in place, the idea of an E3 announcement seems fairly unlikely, and the notion of a current-gen utilisation for cloud tech doesn't make a lot of sense simply by virtue of the fact that the datacentres are built around PC technology. Third party PS3 games (with PC versions) could be utilised within the existing infrastructure but Sony's vast range of exciting platform exclusives would be completely locked out.
In last weekend's Digital Foundry article for Eurogamer, I suggested a potential technical solution in which Sony could utilise an upgraded form of its PSP Remote Play in custom PS3s installed into cloud datacentres - but even if this solution did come to pass, the latency implications are frightening. We'd be looking at game lag (typically 100ms to 133ms) on top of encoding latency (33ms) before the data is even sent across the internet and decoded client-side. In short, all of the work done by companies like OnLive and Gaikai in minimising lag would be undone in this scenario, and the experience would likely be horrible on any action-orientated title.
In the here and now, cloud isn't a good match for a large percentage of gamers for other reasons too. The launch of OnLive proved that overall broadband infrastructure in the UK remains relatively weak, leading to an immensely variable service. The notion of a 5mbps cap on bandwidth also presents issues - it's just about enough for 1080p movies running at 24 frames per second, but videogames are defined by being bright, vibrant, with lots of action - anathema to video compression technologies. Gaikai improves video quality over OnLive, but in certain gameplay situations it can still look rough - nowhere near the pristine level of a local connection. The cloud experience offers a playable yet sub-optimal way to enjoy games, and isn't really up to PlayStation brand standards... yet.
The lack of consistency also extends to latency, which differs on a game-by-game basis and seemingly according to network conditions. At its very best, we are now in the position where cloud can match home console latencies - something many (myself included) didn't think possible, certainly not so quickly - but at worst overall end-to-end latency can exceed 300ms. The potential is there but a combination of an immature platform and shortcomings in infrastructure are holding back the quality of the experience. Enormous leaps have been made by Gaikai and OnLive in getting this technology functional but work continues on refining quality.
So if cloud is not entirely ready for showtime and if PS3 titles are unlikely to be supported, why would Sony ink the deal? First of all it's important to remember that Sony is more than just PlayStation - it is a company tasked with the unenviable job of reviving the fortunes of its ailing TV business. Gaikai has already announced a tie-up with LG for cloud gaming integration with its smart TVs - and perhaps this is the context in which we should be viewing any potential Sony deal rather than automatically associating it with PlayStation gaming.
Put simply, with its major rivals looking to supply built-in videogames via the cloud with their HDTVs, Sony would be at a significant competitive disadvantage against its rivals if it didn't follow suit. With this deal, not only can the company compete, it could - in theory - leverage its extensive contacts in the business to offer the best library of titles, plus elements of the PlayStation offering could be gradually integrated over time.
This leaves us with the very real possibility that if there is a deal to be announced within the proximity of E3, it may not even be at the PlayStation conference at all - there's the possibility that it could be an entirely separate announcement from a different Sony division.
"Cloud is an important element in the future of gaming and now's the time for Sony to be investigating the tech and building the right relationships with experts in the field"
There are many reasons why such a deal makes sense for the company. In the short term it can match the Smart TV features of its competitors, but in the longer term, the health of the PlayStation brand itself may be at stake. If cloud is an important component of the future games market, Sony needs to be ready.
The firm will be acutely aware that it has failed to anticipate future trends in markets it has previously dominated, notably to the detriment of its Walkman business - a once unassailable brand comprehensively dismantled and reduced to irrelevance by the rise of the iPod. The power of its Trinitron and WEGA brands is also a thing of the past and in the present, Bravia isn't really living up to expectations. Sony simply cannot afford the same fate to behalf PlayStation, and by having a cloud deal in place in the here and now, some of the best games engineers in the business have the chance to become au fait with the new technology before it becomes a viable mainstream proposition.
Fears that this deal could spell the end of PlayStation 4/Orbis are almost certainly without foundation. While I fully expect cloud streaming from the console platform holders to be realised during the lifecycle of next-gen consoles (perhaps in the form of a parallel service to complement its traditional consoles) the projected 2013 launch of PS4 is probably too early. A successful cloud platform will be reliant on a level of infrastructure that needs to improve significantly: realistically we need to see bandwidth at least double from the current 5mbps we see, and complete end-to-end latencies, including display lag, need to consistently fall beneath 180ms. At around the 200ms point, gamers begin to feel that the experience doesn't really work. Games may still be "playable" but they don't feel "right" and enjoyment is compromised.
Gaming is still waiting for its "Netflix moment" - where the advantages of convenience outweigh the impact to the overall quality of the experience. There are still problems to iron out and improvements in picture quality to address, but the video on this page showing cloud lag matching Xbox 360 loca gameplay proves that the biggest major stumbling block to the success of streaming gameplay can be addressed - latency is no longer the insurmountable challenge it was thought to be. Now's the time for the major platform holders to be thoroughly investigating streaming gameplay, and the notion of Sony getting involved in the cloud prior to it exploding into the mainstream can only be a good thing.