Orange County Business Journal

Sony Computer Entertainment in $380M Deal for Gaikai

Chris Casacchia Monday, July 2, 2012

Aliso Viejo-based Gaikai Inc. is set to be acquired by Sony Computer Entertainment Inc. for $380 million.

The cloud streaming company, rumored to be on the sales block the last few weeks, agreed to the deal on Saturday.

Sony Computer Entertainment, the gaming unit of Tokyo-based Sony Corp. and the maker of PlayStation, plans to create a cloud-streaming service that allows users to play “a broad array of content” on a variety of Internet-connected devices, said President and Group Chief Executive Andrew House, of Sony Computer Entertainment.

Gaikai cofounder and Chief Executive David Perry recently told online publisher GamesIndustry International the company had been fielding “a lot” of acquisition inquiries and even suggested Google and Facebook could be interested.

The June 28 interview came on the heels of recent reports that Gaikai hired a team of investment bankers to shop the company.

Gaikai’s cloud-based streaming technology deliver games directly to consumers via websites, social networking sites and most recently smart TVs.

Late last month it streamed the first-person shooter Bulletstorm game to the Chrome web browser in a demo at the Google I/O conference in San Francisco.

The company unveiled a partnership with South Korea-based Samsung Electronics Co. Ltd., the world’s largest TV and consumer electronics maker, in mid June at the Electronics Entertainment Expo in Los Angeles.

Gaikai has targeted the top companies in the video development, retail, consumer electronics and social media sectors—all keys to the video gaming market−since it was established in 2008.

Last year it signed an agreement with Bentonville, Ark.-based Wal-Mart Stores Inc. to stream video games on walmart.com’s Gamecenter, where visitors can test games and buy them, get previews and preorder hot titles. Then came a deal with Bruno-based YouTube LLC to deliver a demo of EA Sports’ Fifi 2012 game through its website.

Gaikai in April launched a Facebook app that delivers high-quality games directly to consumers through the Menlo Park-based social networking site.

“We’re in a good place right now,” Perry told the Business Journal last month.

Investors shrugged off the deal, sending Sony shares down nearly 1% in late morning trading to a market value of roughly $14.1 billion.