Gaikai targets all major publishers by year end
Following EA deal, streaming service expects flexible business model to appeal to all publishers and retailers
Ambitious online streaming service Gaikai has said that it expects to tie down deals with all the major games publishers by the end of the year.
The company has announced its first partnership with Electronic Arts' PC catalogue, which includes Dragon Age, Battlefield and Medal of Honor titles, and is expected to launch within the next two months.
When asked how many publishers Gaikai would like to be working with by the end of the year, founder and co-chief technical officer Andrew Gault said "all of them," adding that "it's the easiest conversation ever."
"A publisher comes in and sits down, sees the demo - that's amazing - we explain the model and that it's cheaper than what they currently do," he said.
Gaikai allows publishers to host playable games on their own sites with friction at a minimum – the player clicks a link and is instantly thrown into the game. It's this ease of use, with no downloads or sign-ups, coupled with a less expensive business model, that convinces publishers of the value of the service, said Gault.
"A publisher has to drive traffic from where the consumer currently is to a portal, to another website, a custom mini-site for the game. That costs them a lot of money - 50 cents to a dollar for highly targeted traffic.
"We're saying you can avoid that cost because we're putting the demo where the user already is. And for a thirty minute demo it's 30 cents. The cost is comparable if not cheaper, and it's a cost per action. The user is driving the amount. They're not seeing a demo or watching a YouTube video. And it's not a marketing demo that the user doesn't trust."
On a basic level Gaikai charges the publisher one cent per minute to host the game, with 100 per cent of any game sales going straight to the publisher. The quality of the streaming service is set by the publisher, as is the amount of time – a driving game might only be a 15 minute experience, but a deeper RPG could be available for a couple of hours – and once the demo is complete the user has the option to buy the game.
"If you're playing on the EA Store then the publisher will only want users to buy from them. If we were on a retail website like Amazon, they obviously want to increase their conversions so the demo could be paid for by Amazon or the publishers themselves," detailed Gault.
"I'd imagine for the first few months of sale the publisher might pay for it as part of their marketing push and they could subsidise banners on Amazon. But there's a long tail so it's quite likely that after a few months a publisher might want to move on to another game but Amazon could still be seeing great conversions. No one has a problem with them hosting the demo - the publisher sells more games, Amazon gets a slice and we get paid. It's win-win-win."
Gault also pointed to retailer solutions where finishing a demo would present a number of options for the user – download digitally or print of a coupon for discount on a boxed version of the game on the High Street.
"The retailers are every interested in this. Retailers are very excited, as much as the publishers, because they see the opportunity," he said.