Limelight Ventures Invests in Gaikai and the Future of Cloud Gaming

If you’re a gamer, you may already know about Gaikai. Last month the company announced Electronic Arts as a publishing partner, and for the last year Gaikai has been pretty vocal about its aspirations in the cloud gaming space. In brief, Gaikai works with publishers to advertise titles using pop-up game demos. So, for example, if EA wants to promote a new game in the Sims series, it can use Gaikai to embed a demo of the game at online retail sites like Best Buy or Gamestop. The goal is to stop the “funnel of pain,” as Gaikai CEO David Perry calls it. Instead of moving gamers off a retail site to learn more about a new title, Gaikai offers one-click demo access so visitors can test out a game without ever leaving the store’s domain.

Limelight Networks announced today a strategic investment in Gaikai. It’s the first venture investment made by the company, and it reflects our belief in gaming as an area with serious potential for growth in the cloud services arena. Gaikai is unique because of the business model it’s established, and because of its desire to work with game publishers rather than against them. However, Gaikai is also representative of a growing market in the online gaming space – one that looks ready to explode over the next couple of years.

The match between Limelight Networks’ scalable infrastructure services and Gaikai’s delivery model is a natural one, and it’s easy to envision just how Gaikai’s model could expand with Limelight’s resources in the future. For the moment, however, the focus is on Limelight Networks’ financial support of the start-up gaming company. CEO Perry notes that Gaikai is set for a soft launch in the next couple of weeks.

This entry was posted on Tuesday, July 20th, 2010 at 8:05 pm and is filed under Cloud, Content Delivery Network. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.