Head in the Cloud
Dave Perry gives first details on his plans for cloud gaming outfit Gaikai, and why the competition is "doomed"
The question is, can it be done technically? Not in the past, no. But today, absolutely. The issue that we have in the US is that we're very slow on the uptake of real broadband. I'm embarrassed, I come from Northern Ireland, it's this little place, and they've got much faster internet connections than we have. We're in California, Silicon Valley, but are you kidding me? It's rubbish. The thing that's retarding this is simply the uptake in the US. In European country's content delivered like this is a given. In Asia there's no issue whatsoever.
The company that I have, Gaikai, it's just that our solution is arguably better than anything OnLive has. But of course I'm biased. I'll tell you the reason why, and there's one reason why we're better than them – they're never going to be able to beat us on this. They have to download one megabyte and install it on your computer. What does that mean? It means that everyone in schools, or any kind of uptight or professional business location is not going to be able to download some random game via the internet and install it. And they'll have to go through patches and updates and everything else. Ours has no download. That's the difference. It seems trivial, only one megabyte download, but it's not, it's the act of having to download it.
I know from the free-to-play games business that we lose approximately 60 per cent of our players, and we pay for that. We have this funnel where players start downloading the game, and they start falling down the sides during the download process. It's stunning how many complete the download process – the whole thing – and then never click on 'install'. They get distracted, it took an hour and a half and they've gone off and done something else. There's a certain amount that actually click install and then run out of hard-drive space. And then they need to get the latest drivers. And we require registration, and people hate that. And at the end of the day, when they show up in the game, we've lost 60 per cent. So we have a much bigger audience that we've paid for than we actually get. We're left with 40 per cent and we're hoping they will continue and actually make us money. If we can solve that, we get 60 per cent of our audience back.
With Gaikai we're not going to make users register before they play. Ultimately, we're not going to do what the obvious is because we've learnt a lot from the free-to-play business. We've got tricks that are very important to getting frictionless involvement with entertainment media. OnLive is creating friction and they are forever doomed as a competitor if they have to do that. What we're always looking for is the next step that will make it even easier.
As well as that, it's about price. You don't have to buy a console. I want to be really clear about what the concept is. The concept is you can play PlayStation 4 games without having to actually buy it. You can play any major title without actually installing it. You never have to go through any of the pain at all. It's frictionless from beginning to end. And that's the value.
You have a revenue sharing deal. It depends, but the obvious way is to say for the amount of time people choose your game, you get that percentage share. So 50 per cent of playtime goes to your game, you get 50 per cent of the revenue share. It goes in a pool and we take a percentage for maintaining and running the service.
That's a really good question, because the problem was I planning to launch this at E3. I was extremely frustrated, OnLive has been working on this a long time, and they're not done. They are nowhere near done. It's frustrating because they stole the limelight and I feel pushed to talk about it before I'm ready to talk about.
They know there are other people coming. They're smart. Do I hope they're successful? You bet I do. And secondly, talking to content providers is always a lot easier when someone else has already done a deal with them. I think overall it's a very exciting thing. But at the end of the day it's going to come down to a technology decision by the consumer, what's easiest?. And I think that's where we're going to win. I would be concerned if I was them, I would be very concerned, because they've placed their bet on the table and committed to it now.
David Perry is co-founder of Gaikai. Interview by Matt Martin.