Despite over a decade of development, the promise of cloud gaming remains unfulfilled, according to the CEO of Sony. Kenichiro Yoshida expressed that cloud gaming is still technically challenging, particularly in terms of addressing latency issues and ensuring fast response times demanded by gamers. Sony remains cautious about the rapid conversion to cloud gaming, despite Microsoft’s heavy investment in the technology. Yoshida mentioned that Sony would explore various options for streaming games over the internet, potentially leveraging their artificial intelligence agent, GT Sophy, to enhance cloud gaming.
The reluctance of users to fully transition from consoles or high-end gaming PCs to streaming games over the internet is a significant obstacle. Concerns over lags caused by internet connectivity and server speeds have deterred many gamers. Additionally, game publishers have not fully supported cloud gaming, as demonstrated by Google’s shutdown of its Stadia streaming service due to limited availability of top titles.
Sony was an early player in the cloud gaming market, acquiring cloud gaming company Gaikai in 2012 and later incorporating OnLive’s technologies. Although Sony launched a cloud gaming subscription service in 2014, analysts believe the company hasn’t capitalized on its early entry to establish itself as a leader in the field.
Yoshida also highlighted the inefficiencies of cloud gaming, where servers remain idle for most of the day and experience high traffic during peak gaming hours. To address this, Sony has used quieter hours to deploy GT Sophy for AI learning in the auto-racing simulator Gran Turismo. Yoshida did not comment on the potential impact of Microsoft’s planned acquisition of Activision, stating that regulatory reviews were still ongoing. The deal has raised concerns in the gaming industry, particularly regarding Microsoft’s potential exclusivity of Activision’s games on its own cloud gaming service, which could accelerate the shift away from consoles.
While the UK competition regulator blocked the acquisition due to concerns about Microsoft’s dominance in the nascent cloud gaming market, EU regulators cleared the purchase with concessions from Microsoft. If the deal proceeds, Microsoft would become the third-largest gaming company by revenue, trailing China’s Tencent and Sony.