On February 20th “The Future of PlayStation” Might Not Be the PlayStation 4, It Could be Something Bigger

Joel Taveras February 18, 2013 1:00 PM EST

In a couple of days, all eyes will be on the Hamerstein stage in New York City as Sony shows us “the future of PlayStation.” And while all signs point to a PlayStation 4 reveal, there’s another service that will likely steal the show. Sony’s purchase of Gaikai last summer for $380 million dollars may finally begin to bear fruit, and it could turn out to be Sony’s best move since, well… ever.

Late last week the Wall Street Journal reported that the PlayStation 4 will stream PS3 games. And while I’m sure that selling it as “backwards compatible” is partly the intent, it’s not really thinking big picture. Despite the fact that PS3 emulation on the rumored PS4 provides its own set of challenges due to the change in architecture, streaming over the web is likely in the favor of consumers: keeping hardware costs down since Sony won’t have to cram PS3 hardware into the PS4 — like they (initially) did with its predecessor. At the same time, it opens up PlayStation to a whole different idea since this “instant on” gaming works, for the most part, on the back end. Essentially, most consumer electronics with a screen that also happen to be connected to the internet could potentially become a PS3, PS2, and PS One.

A ‘PlayStation’, that doesn’t need an actual PlayStation.

This opens up completely new revenue streams for Sony and PlayStation. Think about the next time you shop for a new Smart TV and one of the features on the box is “PlayStation Ready.” The same could be said for your next set top box from your cable provider. Your next cell phone. Your next tablet; the list goes on.

A couple of years ago, something like this was unheard of. Especially since the speeds were simply not there. But as broadband penetration widens, the technological hurdles become smaller. Bottlenecks that might have existed last year are no longer issues in the next year. Some people will complain that these kinds of streams will only be 720p at first, and to those I say, show me when Uncharted 2 didn’t run in 720p and then I’d say you have a case. It will never be good enough to the most critical of pixel counters out there, but to the masses, It will likely do just fine.

This could also be a way that Sony can win over (some) gamers in the event that, like Microsoft is rumored to be doing, Sony too finds itself eliminating the use of used games on the PS4. There’s not enough evidence to prove that this is happening, however; there’s not enough evidence to prove otherwise. And while I won’t argue here where exactly Sony sits on that controversial fence, what I will say is that the ability to stream a game collection (at a decent subscription price, of course) will help to smooth things over just in case PlayStation does indeed go down the dark path of blocking used games.

In doing something like this, Sony has the ability to bring in some serious green. How much you ask? Well, if they were to get 10 million subscribers on board (and that’s being frugal), and charge let’s say $20 per month (on average, and assuming that there are different pricing tiers) that’s $200 million per month. The money that they paid for Gaikai would be made back in 2 months, and the service would bring in $2.4 billion per year. Not to mention that this doesn’t include the revenue that would be generated from controller peripherals that users would also buy to play the service on devices like tv’s, phones, and tablets.

We’re talking about PlayStation creating a business that hasn’t previously existed.

On February 20th, I’m sure that, just like others in attendance, I’ll be letting out my fair share of “oohs” and “aahs” while sitting inside the Hammerstein getting hit in my face holes with announcement after announcement. But if Sony pulls off what I think they’re about to pull off, they will set gaming ablaze with excitement. Gaikai, or rather the technology that came from that acquisition, could prove to be “the future of PlayStation,” even more so than the PS4.

All aboard the hype train.