Sony’s Next Act: A Hardware-Less PlayStation

At its New York City event earlier this week, Sony unveiled the PlayStation 4. The device, which will be designed to compete with the next Xbox and Nintendo’s Wii U, includes a beefed up processor and a new GPU that the company says will deliver dramatically improved graphics in games. In fact, the console's GPU alone will be able to deliver almost 2 teraflops of compute performance.

But perhaps the big story behind the event was that Sony didn’t even show off its hardware. Instead, the company talked about the many features its hardware will offer and focused on streaming. When it’ll actually unveil the PlayStation 4 console itself remains to be seen.

That Sony talked so much about cloud gaming and neglected to show off the PlayStation 4 hardware is telling. Last year, Sony acquired cloud-gaming company Gaikai and said at that time it believed the future of gaming was in streaming. With the PlayStation 4, it seems ready to embrace that future -- to a point.

By the time the next PlayStation would be due, however, expect cloud-gaming to take center stage and its hardware to, well, all but die.

Now I realize that the idea of cloud-gaming replacing consoles is something that has been suggested for a long time. But each time such an idea is presented, console makers scoff, saying that hardware is a necessary component in our gaming experience. And for this generation, that’s clear.

But the next generation will be different.

Assuming Microsoft jumps into the next-generation console market this year as expected, we’ll probably see the next, next generation in about five to seven years. Between now and then, it’s not beyond the realm of possibility that most console makers will deliver games from the cloud, as broadband speeds increase and publishers do a better job of managing file sizes.

Realizing that, Sony (and others) might question why it should go through the expensive and painstaking process of developing expensive hardware. Wouldn’t it simply make more sense to be the de facto provider of cloud gaming?

If the technology industry has taught us anything, it’s that there are real benefits to being a solutions provider. It means eliminating the huge cost of hardware development and production and in the gaming space, cuts down on the years of losses companies must take on in order to build a critical mass of customers. Simply facilitating the transfer of games from all kinds of developers to gamers on their product of choice makes far more sense for Sony.

Of course, cloud-based gaming will still require some hardware due to the massive costs of an all-digital setup, but why should Sony be the company to deliver it? Sony's recent PlayStation troubles have proven that the company has difficulty profiting on consoles. It might just be better for Sony to accept that another company will deliver a uniform platform, and it can get down to the business of facilitating the transfer of developer titles to that device.

Valve's Steam service, with "Big Picture" mode

Steam is perhaps the furthest ahead in that push. The company is currently offering a platform that’s designed to cut out physical discs and deliver titles remotely. Steam has said time and again that the future of content delivery is over the Web and it’s important that companies embrace that.

Sony seems like the ideal candidate to follow Steam's lead. The PlayStation is wildly expensive and losing some of the traction it once had among gamers. Plus, Sony itself is hemorraghing cash as its tries to reinvent itself around a handful of divisions. Perhaps its next logical move is to go to the cloud and become a service provider for gamers.

If Sony leaves the console market, which company might step up to deliver that singular platform that will deliver games to the television? At this point, it's tough to say. Steam is trying to work its way into the space, and Microsoft, with its billions in cash and recent hardware obsession, seems like an obvious choice. But the gaming industry has taught us over the years that nothing that happens today can inform our predictions for the future. Too much can change in a short period of time.

Something that won't change, however, will be Sony's desire to establish itself as cloud gaming's leader.

Of course, there are pitfalls the company will need to overcome and eventually, it might find itself competing with developers, but it’s the next logical step for Sony. And the fact that it focused so much of its presentation on cloud gaming and so little on hardware at its latest event, indicates the company might be moving that way.

Get ready: this might be the last time Sony launches a PlayStation console.