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Machiavellian said:

From my understanding Gaikia does not leverage spreading a game over multiple servers, instead, Gaikai spins up an instance of that game for each user that is playing the game.  What Gaikai could do is take the rendered output from the game and spread that out to multiple servers for processing which is pretty easy with video output.  The difference with MS solution and Gaikai is that MS solution does not need an instance of the game running for each user.  Instead one main hosted instance can be used to support multiple users as the hosted instance just neeeds to sync the streams and send the data off to be process by mutliple servers.

Another advantage of MS solution is that its not dependant on the hardware.  For Gaikai to work, the game is actually rendered on PS3 hardware.  I am sure for PS4 games, those games might need PS4 hardware as well.  MS solution can use any combination of hardware and software making the cost lower to support.

We don't know how gaikai exactly works (i mean tech PoV, like load balancing). Besides, games don't need to run PS3 hardware. If development mashines were PCs, then i see no problem to run it on regular servers.

You also seem to forget about one very important thing - purpose. Gaikai aims to deliver sort of emulation for older games. This is only an addition, charged service for those who want to play some good, older games. And the whole thing behind this MS cloud thing is to deliver performance on the pair with PS4 for all modern games. And still, Sony has shown working Gaikai games, and more or less release date (in few months!), while MS shown nothing but simple, labolatory demo of something we might not see in this decade.