Streaming is the future. It may be that streaming becomes the most popular form of distribution for publishers, or it may be that it becomes a mostly optional service, used to a lesser extent than physical copies or digital downloads but still a major feature of next gen systems; either way, it's inevitably going to be a big part of gaming's future. Sony recognises that, and is preparing for the cloud by acquiring a leading game streaming platform, Gaikai.

So what does this mean for Playstation? Well, I've got a few ideas:

PS1/PS2/PS3 games streamed to your PS4. 

This solves issues on both ends. It saves Sony money, or lowers the price of the PS4 by not including the hardware of previous generations and it gives the consumers what they want, their library of last gen games available to play on their current gen system. The only issue here would be getting your PS4 to know what PS1/2/3 games you own, my solution would be it somehow "knowing" your PS3 disc and the content on that disc and then allowing you to stream that game. The same could be possible for PS1/2 but I think having all PS1/2 games (or the "greatest hits") availiable to stream as part of a subscription service would be best suited here, and would make for another great perk to playstation's existing premium subscription service, Playstation Plus.

PS3/PS4 games streamed to your PSVita.

The PSVita has practically the same controls as the PS3's dualshock 3 (minus the L2/R2 buttons, but those are easily replaced on the touchscreen or back touchpad), making it perfect for this. It already has a similar feature to this called Remote Play, allowing your PS3's XMB to be streamed onto your PSV, however Remote Play allows interactivity with an extremely limited amount of PS3 games and requires your PS3 to be switched on. I think something like Remote Play has tremendous potential, if it had the whole PS3 library available and was streamed from a server rather than your PS3 it could be a brilliant selling point.

PS4 is the PS5.

If streaming really does succeed in replacing digital and physical distribution by the end of PS4's lifecycle then a PS5 in the form of more powerful hardware would be totally pointless. Thanks to streaming, the PS4 may be the last Playstation console you buy. How would Sony profit from this? Maybe you would pay a subscription for access to next gen games, or maybe you would pay a one-time payment, say of £100 to unlock the "PS5 games."

What do you guys think?

If I can stream music from my iphone to my ps3 that's good.

On another note, they can do whatever they want if i can play Star Wars Battlefront 2 on my PS3

Making Hawken PS3 exclusive... Which would be a great loss for the gaming community imho

I really like your first two ideas, especially the one with streaming them to the vita. I would say though that with the vitas lack of L2 and R2 wouldn't games that use those buttons need to be redone to use the back touch pad or touch screen.

I really do hope that when the ps4 is released they will allow you to stream all past playstation games that have been re-licensed for the service.

Apparently sony is trying to get the streaming service available for the ps3, of course this is just a rumor. I would imagine that it will be a paid subscription to play unlimited games. It might be in there best interest to have a subscription without PS+ and one with PS+ that offers a discount to the subscription. Or they could have unlimited streaming with a PS+ account.

Good ideas but think outside Playstation too. Stream to Sony's phones, blu ray players, tablets and laptops. Set up a Playstation-branded demo service on PCs where PC players can try out upcoming PS3 exclusives for free.

I've thought about that too, but I wanted to focus on what this means for Playstation rather then Sony as a whole.

I was duped! Lol.

Games that are available on PS4 could be streamed to Sony TVs.

Before someone says 'why would anyone buy a PS4 then' , PS4 still has an advantage in that you need it if you don't own a Sony TV, if you like physical copies, if your internet is slow, if you like the multimedia functions, etc.

Alan Wake demo on PS3. Hilarious....

I like your ideas and as a few others said this is a great option. But removing the retail element wont be a good solution in the US for a long time. I don't know what things are like in the UK, but one of the biggest boons to the US being so expansive is that ISPs have not spent the money to build good quality infrastructure in many parts of the country. There are a lot of city's that don't offer high speed internet, or the high speed internet is very unreliable.

This will make it hard to totally cut retail distribution totally out of the mix. But I can see it becoming a much smaller part of the business.