Gaikai teases WOW on Facebook

Who was there: David Perry, chief executive of cloud gaming service Gaikai.

What was said: Traditionally, growth in the games industry hasn't been gradual--it has been a series of step changes, according to Perry. This is just as true now as it was when the Sinclair ZX moved up from a 1K device to a 16K device.

The step from large storage capacities of Blu-rays, solid-state storage, and hard drives to unlimited cloud storage will be a similar jump, he said. The fact that technology already exists to give gamers almost-instant access to every game ever made is a significant opportunity no one has exploited yet.

Various other hurdles are also about to be jumped, Perry said. Speech cognition, situational understanding, and AI have all been held back by hardware limitations--but the massive increase in resources that comes with the cloud will put an end to all these limitations.

Used-game sales from the likes of GameStop are accelerating these changes, as they are encouraging publishers to look elsewhere for cheaper distribution options. However, he also held up GameStop as a "shining example" of a company that was investing in a smart way to survive the shift to digital.

The shift to digital platforms will be of massive benefit to gamers, according to Perry. "Free-to-play is pro-consumer" and not something gamers should be "hating on," he said. He went on to describe how traditional publishers could learn from social games by decreasing "friction" in allowing people to try to share games they're enjoying. While cost is one of the main sources of friction, Perry said, much of it is about just making it easier for gamers to play your games.

Making demos easier to access; lowering barriers to entry in terms of downloads, legal agreements, and registration overheads; and making the consumer's needs central to developers' thinking will be key. Apple's approach shows how reducing friction can benefit your sales, as it revolutionised mobile gaming simply by making it easier for gamers to play.

Although Steam "saved PC gaming," it is a terrible platform when it comes to friction, Perry said. He illustrated this argument by showing the full 43-step process required to get hold of a game demo via Steam, suggesting a process this long will lose the vast majority of consumers. He said that according to Gaikai's research, 73.5 percent of gamers would choose cloud delivery for games if it were an option.

Most of the money in the industry comes from hits and high-quality games, Perry said, and it's just a matter of bringing those games to the mass audience by making them as easy as possible to try to start playing.

This is something Gaikai is working hard on, said Perry, showing a quick demo of Gaikai's Facebook service that will let anyone stream games through Facebook and play titles such as World of Warcraft, Bulletstorm, and the like without ever actually leaving Facebook or downloading anything. The service will be launched in the near future.

Takeaway: Consoles are becoming obsolete, according to Perry--and the only thing stopping game companies from increasing their audience is how hard it is for people to start playing their games.

Quote: Of World of Warcraft: Cataclysm: "Its launch-month sales meant that if it was a Facebook app it would have debuted in 67th place."

[UPDATE]: Shortly after the publication of this report, a Gaikai representative provided GameSpot with a statement regarding Perry's presentation. According to the representative, "Gaikai is NOT bringing WoW to Facebook (at least not in the foreseeable future). David Perry forgot to preface the demo by saying it is purely a tech demo, to demonstrate how long the sign-up process for games can be and to show how Gaikai can make it so much faster and simpler for consumers." [Emphasis in original.]