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Sony Snaps Up Cloud Gaming Company Gaikai for $380 Million

Are cloud-based gaming services ready for the big time? Up until now, streaming playable 3D games have largely been relegated to smaller companies such as OnLive, but today, that changed with the news that Sony has agreed to acquire Gaikai, a leading cloud gaming service provider, for a cool $380 million.

Mobile gaming is constrained by form factor and energy requirements. Simply put, big time 3D gaming takes big time juice and great big components. Cloud-based services like Gaikai handle all the heavy lifting on their own servers, then stream a video of the gameplay to your device. Low latency times ensure that games feel smooth as you control them -- almost as if they were running on your local device -- and since all the processing is handled off-site, cloud services let you play games on devices that could never handle the load otherwise, such as on tablets, TVs and phones.

Sony, obviously, is no stranger to the gaming world: PlayStation consoles have sold hundreds of millions of units worldwide. The company's PlayStation Mobile initiative (formerly called PlayStation Suite) brings PlayStation games to Sony's Xperia-brand phones, the Tablet S and Tablet P, and the gaming-focused PlayStation Vita. HTC also recently announced plans to bring PlayStation Mobile to its flagship HTC One phones.

PlayStation Mobile seems like a natural fit for Gaikai's gaming technology. If Sony brings streamed, full-fledged titles like Mass Effect 3 to portable devices, it could hold massive ramifications for the mobile gaming market -- and encourage other manufacturers to sign up for PlayStation Mobile.

All Sony will say is that it "will establish a cloud service and expand its network business by taking full advantage of Gaikai's revolutionary technology and infrastructure including data centers servicing dozens of countries and key partners around the world."