One of Console Makers Will Pull Out from Hardware Business - Gaikai

Gaikai Expects One of the Console Makers to Withdraw from Hardware Business at E3

by Anton Shilov
01/11/2012 | 11:17 PM

Gaikai, a video game streaming service, said that the company expects one of the current game console platform holders to withdraw from hardware business at the E3 trade-show in mid-2012. Given that Nintendo has already unveiled its next-gen Wii U, only Microsoft and Sony may break the news at the forthcoming show.


"Not all of the current console makers will have one more generation. That will be the big news at E3," said Nanea Reeves, chief product officer for Gaikai, reports IndustryGamers web-site.

Development and ramp up of new hardware for game consoles is a lengthy and expensive process that takes several years and hundreds of millions of dollars. In many cases platform holders have to sell consoles at a loss hoping to earn money on video game sales, which takes time and requires a lot of financial power.

Nintendo will clearly release its Wii U video game console this year, hence, it is not withdrawing. Sony has publicly confirmed development of PlayStation 4 and rumours are circulating about hardware for Xbox Loop (Xbox Next), therefore, the company may also be planning a new piece of hardware.

Selling video games and accessories for particular proprietary platform is a natural way for companies like Microsoft, Nintendo or Sony to earn their profits. Without proprietary games and hardware those profits and revenues will quickly erode making it hard for those companies to earn. As a result, it hardly makes sense for those three platform holders to sign a deal with game streaming service just now. Still, it is not completely impossible that such a deal will not be signed in the future.

Neither Microsoft, nor Nintendo, nor Sony commented on the news-story.