Sony Computer Entertainment announced that they’ve entered into a definitive agreement last June 30 to acquire Gaikai Inc., the world’s leading interactive cloud-based gaming company, for approximately $380 million.  Cloud gaming has introduced the next wave for an industry that’s fast taken to virtualization and mobility, and this is an opportunity for SCE to maintain a stronghold for the market.

“By combining Gaikai’s resources including its technological strength and engineering talent with SCE’s extensive game platform knowledge and experience, SCE will provide users with unparalleled cloud entertainment experiences,” said Andrew House, President and Group CEO of Sony Computer Entertainment Inc.

“SCE will deliver a world-class cloud-streaming service that allows users to instantly enjoy a broad array of content ranging from immersive core games with rich graphics to casual content anytime, anywhere on a variety of internet-connected devices.”

Gaikai was established back in 2008 and since then, they have developed some of the highest quality, fastest interactive cloud-streaming platform in the world that enables the streaming of quality games to a wide variety of devices via the internet.  With the acquisition, SCE will be able to establish a cloud service and expand their network business by taking full advantage of Gaikai’s technology and infrastructure, including data centers servicing dozens of countries and key partners around the world.

Aside from having a new cloud service, SCE could also utilize Gaikai to address backward compatibility in PlayStation 3 games and their upcoming PS4 gaming console.  If Sony does this right, they could jump into the lead in the console wars, as making PS3 games compatible with the PS4 could mean that the soon-to-be launched console would cost less.

Gaikai could also be employed in such a way that it would help prolong the lifespan of the PlayStation system.  As years go by, console makers tend to release a new console with new titles.  But with Gaikai, all Sony needs to do would be to upgrade the hardware in the data center and the PS4 could play beefier games without having to change anything in the PS4 itself, minimizing the need to build a whole new gaming console.

“SCE has built an incredible brand with PlayStation and has earned the respect of countless millions of gamers worldwide,” said David Perry, CEO of Gaikai Inc. “We’re honored to be able to help SCE rapidly harness the power of the interactive cloud and to continue to grow their ecosystem, to empower developers with new capabilities, to dramatically improve the reach of exciting content and to bring breathtaking new experiences to users worldwide.”

The acquisition takes a huge toll on competitors wanting to utilize Gaikai’s technology, including  Samsung and LG, who previously struck a deal with Gaikai for cloud gaming on smart TVs.  If Sony hadn’t stepped in, the deal with Samsung and LG could’ve cost them their business, as cloud gaming on smart TVs is expected to disrupt gaming on consoles in the coming years.