dmfinn writes "With less than 5 days until the reported PS4 launch event, new details are emerging regarding some of the console's next-gen capabilities. Since last June, Sony has been quietly sitting on its $380 million dollar acquisition of Gaikai, a cloud based gaming company. The Wall Street Journal, among other sources, is now reporting that the PS4 will have GaiKai's cloud-based gaming technology directly integrated, thought it is unclear exactly what types of games will be available for streaming. Back in June, a rumor circulated that Sony was planning to use the technology to support backwards compatibility with PS2 and PS1 games, though no further details have arisen regarding whether or not the new console will be able to play previous generation games. It appears that Sony will most likely be using the service to stream PS3 and indie games to the console, as the current technology only supports 720p, not high enough quality for blockbuster games. Constantly streaming interactive graphics, even if only at 720p, will still require a fast internet connection. Services like OnLive have struggled in the past due to the large amount of bandwidth they require, and many consumers complained of laggy connections and horrendous graphics. There is no word yet regarding the features of the games being streamed, including whether or not they will support online or local multiplayer."
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