Apr 03, 2015

Why did Sony buy Onlive, only to shut it down a few months later?

Onlive is (was) a service that worked kind of like a Netflix for PC games - a cloud based, subscription gaming collection. Sony recently acquired Onlive, only to announce it is being shut down at the end of April. Why would Sony spend millions of dollars, when Sony itself has financial issues, only to shut down Online a short time later?
Sony Buys Up OnLive’s Patents Amid Service Shutdown

"It’s not so surprising that the beleaguered online game-streaming service OnLive is officially shutting down later this month. What is a bit surprising is how Sony (NYSE: SNE) swooped in to pick its bones clean by purchasing OnLive’s patent rights, presumably to bolster its own game-streaming service PlayStation Now.

Sony has won out big here. The Japanese gaming titan has acquired an extensive patent portfolio specifically targeting cloud-based game-streaming.

Thus armed with OnLive’s array of patents, Sony stands to enhance and fortify its currently underwhelming and unpopular PlayStation Now game-streaming service."
Two reasons come to mind. First, Sony recently rolled out PlayStation Now, which, like OnLive, is a cloud based service that allows subscribers to “rent” games online and have immediate access to them. They were able to eliminate a potential competitor that was already somewhat established in the market.

Second, and this is the more likely reason for the acquisition, Sony gained access of all of OnLive’s patents, as well as their expertise and proprietary technology. Instead of making the same mistakes that OnLive did and having to solve them on their own, Sony can painlessly learn from OnLive’s experience (well, painless except the acquisition cost).
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