Nine nifty facts about Gaikai

Does a good thing ever present its own problems? Quite often, actually. Ask the Gaikai team. The company’s co-founders have in the last two years built a cloud streaming service of staggering flexibility and simplicity.

And the problem with that was deciding where to go with the technology. Games or computer apps? Subscription service or ad-supported free-to-play? Full games or demos? All could work, but what to pine for?

The three Gaikai co-founders eventually opted for game demos in the first phase of the company’s business plan. But with phase two (full game streaming) already pencilled in the company diaries – Develop presents a list of ten things you need to know about Gaikai as it stands today.

Develop also spoke to two of the firm’s co-founders, Andrew Gault and Rui Pereira, to offer input.

1. Gaikai makes money for others like this…

The streaming technology will provide game demos across a broad range of websites – from core gamer news sites, to a publisher’s own product page, to something like a game’s listing on Amazon.

After completing the Gaikai-powered demo, the player will be redirected to a product page where they can buy the game they just sampled. The allure of this service, of course, is that people who have just played the demo are more likely to buy the game if a ‘buy now’ icon is thrown under their nose.

Who determines where the player will be redirected will be the one who pays for the Gaikai demo service.

So, a publisher may want to redirect a player to its own digital store, or it may want to direct players to an online retailer. If it decides where the player ends up, it pays for the service.

“But I’m sure a publisher won’t mind if a retailer pays for a demo and directs players to their own online store,” adds Gault, “because ultimately, the retailer is still selling the publisher’s product.”

But some game websites can benefit as much as publishers and retailers, as Pereira explains:

”Some websites, such as IGN, have their own digital download store. IGN, in fact, has this games portal called Direct2Drive, and if Gaikai were in place it would act as a bridge between the main IGN website and its store.

If a Gaikai demo of a game could appear on its IGN review page, for example, it would have reached an audience who are clearly already interested in the product.”

2. Gaikai makes no money from sales

You may have thought that – since Gaikai is a service that sends people to product pages – the group would take a slice of game sale revenues. That was a temptation eventually snubbed out, as Gault explains:

“It would ultimately be a bad idea. As soon as we try and take a cut of the sale, that’s when we’d face problems. Even if it was something like an 80/20 or 30/70 split, I imagine publishers and retailers will be turned off. We don’t want any of that.”

Gaikai is a business that isn’t built on cutting into sales revenues. Instead, it is a service that will be bankrolled by marketing expenditure – by offering a service it hopes is regarded as better targeted than what’s available today.

”Publishers pay huge sums of money to get their games recognised,” says Pereira.

“Banner ads on websites, billboard ads, magazine ads, publicity stunts, these all cost publishers and we are offering a targeted alternative which we see as comparatively cheap,” he adds.

3. Gaikai’s business model is ‘$0.01 per minute’

So how does the service make its money? Simple, it charges for the streaming of demos, at $0.01 per minute for each user.

”And it’s risk free,” says Pereira. “If no-one wants to play a demo, no one will stream it and no one will be charged. And those who play the demo most are more likely to buy.”

The Gaikai team is confident that the 1 cent-per-minute charge is low risk, as it will offer game access to consumers who already have an interest in playing the game, and thus will more likely buy the game after a brief play. A one hour demo session, costing the retailer or publisher $0.60, may be more than enough to convince the consumer to purchase a $39.99 digital title.

4. Gaikai is winning over publishers

The first big publisher to throw its weight behind Gaikai is EA, which at E3 announced it will use the ad service for franchises such as The Sims, Battlefield: Bad Company, Dragon Age, Mass Effect, Medal of Honor and Need for Speed.

“Each EA franchise will get the latest additions on an ongoing basis,” says Gault.

He adds: “EA deal, for us, is the start. We wanted to set up our business model so that it’s impossible for publishers to say no. There’s no need to try and steal anyone’s business, because the second we try to do that we’ll hit problems.”

The group said it expects to score deals with all major publishers by the end of the year.

5. Gaikai can be placed on any website, on most devices

The cloud streaming service has been built on the philosophy that ‘friction’ between the publisher and the market can be eliminated.

Downloading times, registration pages and installs all offer players a reason to lose interest. Gaikai wants people to play demos within seconds of having an impulse to play them.

As such, the service has been made as flexible as possible. Gault says that embedding Gaikai onto a website requires a “single line of code”, and it uses tools such as Flash, Java and Silverlight so it is optimised for all versions of all internet browsers.

“And for the future we’re looking at HTML 5,” says Gault, “which would mean just having a web browser should be enough.”

He adds: “Our philosophy is to get games everywhere, we don’t want to turn anyone away because they use different platforms and different technologies.”

David Perry – the third founder of Gaikai – has also touted the possibility of releasing a Gaikai app for iPhone and iPad. He also recently hinted that the service can be embedded on Facebook, and assured that even stereoscopic 3D can be displayed as well.

6. Gaikai promises a swift and sizable ROI

”An investment of $5 million would give us an inventory for 350 million minutes of play time a month,” says Gault.

Taking into account the 1-cent-per-minute business model, 350 million minutes equals max revenues of $3.5 million per month – that’s from a one-time investment of $5 million.

That’s on the proviso, of course, that all the 350 million minutes will be used in a month.

Gaikai has this year obtained $15 million from two investment rounds.

7. Gaikai may revolutionise QA testing

If a picture is worth a thousand words, QA testers may have to start thinking about charging commission.

“Our idea is simple,” says Gault. “Game testers can go through a game on Gaikai, which will stream the data and capture what’s happening on a rolling recorder.

“When something unwanted happens, like the game crashes, we can automatically and instantaneously email a small 30 second video of that problem to the dev team.

“So no longer would a problem be typed onto a keypad or written on paper, problems would be instantly sent to dev teams and they will be able to see exactly what happened.”

That could spell the end for poorly communicated error reports, and indeed could have an impact on the QA culture itself.

“But,” Gault clarifies, “we haven’t worked out a solid business model for this. It’s not as set in stone, but we expect our costs to be covered.”

8. Gaikai offers insider play data

As hinted by the fact that Gaikai can offer error reports during QA testing, the service is also able to analyse huge amounts of player data.

This process isn’t new. Valve’s Steam service uses analytics to adjust its games post-release. If a unsuspectingly large portion of players keep dying on a certain point in a level, for example, Valve will typically release a patch that makes the area easier to get through.

“The game development model has changed since the arrival of social games,” says Gault. “The way games used to be made was dictated by a game designer. The designer would say ‘this is what our game should be’ – and sometimes they get it right and sometimes they get it wrong.

“The power of social game groups like Zynga, with Farmville, is that the group collect a lot of data showing all kinds of info, from how often a button is clicked from where it is positioned, to how often people use certain items, and so on.

“This kind of data is replacing the main game designer’s role. Analytics can dictate what people like. We want to offer game betas out via Gaikai, and during this process, we can feed back player analytics that offer logs of player data that can build a picture of what’s going on.”

9. Gaikai demos can end game demo hell

Game demos may be one of the most cherished freebies for the market, but developers are often glad to see the back of them. In fact, Crytek CEO Cevat Yerli recently told Develop that the free downloadable samples are not sustainable, due to the added pressure they put on studios to build in such short notice.

Gaikai doesn’t necessarily need to stream the traditional customised game demo. The group is welcome to stream just a portion of a game – be it the first two levels or a key moment in the latter stages.

Publishers are encouraged to send to Gaikai the full game along with save point data, allowing only a portion of that full game to be streamed.

But if that is such a good idea in the first place, we ask, why haven’t developers and publishers pursued this route before?

”Firstly, in order to play just a sample of a game – without the developer having to customise anything – then demo file would have to be substantially larger than the size of the sample data.

“It may even have to be the full game with save data attached, so this is tens of gigabytes potentially. That’s expensive to serve and unappealing in size for the customer.

”Secondly, if publishers start offering up large chunks of game data – as opposed to customised demo data – then that data could be cracked and pirated. We’ll have the full game data on our servers, but what we stream can’t be hacked.”