Although video games have their own specialist trade shows, the industry is such big business today that they naturally feature in the Consumer Electronics Show. With it a matter of common knowledge now that the biggest games make more money than Hollywood – even if they don’t produce as much in the way of eye candy and charismatic people to sell them to the public – it is pretty obvious that the world’s biggest trade show related to domestic electronic appliances is going to embrace the runaway success that is video gaming.

Playstation Now

This year’s CES has been no different, despite the fact that the three major players in the current video games market already got their machines out in the last year or so. With the PS4 and Xbox One having been out for over a month and Nintendo Co., Ltd (OTCMKTS:NTDOY) (TYO:7974)’s Wii U being in the public domain for over a year now, attendees at the Las Vegas trade show may have been forgiven for thinking that they wouldn’t see too much in the way of new video games products this time round.

Major gaming announcements at CES

And they’d have been extremely mistaken. Because as it turned out there were two major video gaming-related announcements at CES 2014. And both of these announcements followed a basic theme – a challenge to the hegemony of console gaming over the video game industry.

Firstly, as has been expected for some time, Valve announced its Steam Machine console concept and prototype, with thirteen hardware manufacturers apparently currently building the gaming PCs that are intended for the living room. Many of the biggest names in PC gaming have signed up for this device, namely Alternate, CyberpowerPC, Falcon Northwest, iBuyPower, Next Spa, Scan, Digital Storm, Gigabyte,, Origin PC, Webhallen, Zotac and finally the esteemed Alienware, all of whom will build boxes which plug into Steam’s proprietary operating system.

But the biggest name in console gaming at the moment wasn’t going to let Valve have it all their own way. Sony Corporation (NYSE:SNE) (TYO:6758) has built up a great deal of momentum lately thanks to the outstanding success of its new Playstation 4 console, which has received positive reviews, and outsold its Microsoft rival. Thus, the Japanese manufacturer felt emboldened to announce its latest plan which very much answers the threat posed by Valve’s new innovation.

Playstation Now makes use of the cloud

Sony Corporation (NYSE:SNE) (TYO:6758) used the CES show to unveil its new Playstation Now service. This new cloud gaming platform aims to make it possible for people to play console games without actually needing to own a console. Subscribers to the Playstation Now service will be able to play titles from Sony Corporation (NYSE:SNE) (TYO:6758)’s vast library of games without owning any hardware. The product will be launched in the United States this year, and will initially be available through Sony’s popular range of Bravia smart televisions. However, there are plans to extend Playstation Now to a wide range of devices, which will include smartphones and tablets.

In many ways, Sony Corporation (NYSE:SNE) (TYO:6758)’s new service was just as serious an announcement as that of the Steam Machine, but they are both indicative of the same basic trend. Both companies are essentially preparing gamers for a possible – many would say likely, some would say inevitable – future in which there is no physical media.

Microsoft Corporation (NASDAQ:MSFT) has already given the video gaming community some idea of the disdain with which both console manufacturers and games developers view physical media. When the corporation initially stated upon launching the Xbox One that it would charge gamers to use pre-owned games, they were addressing an issue which has peeved developers in particular for many years.

There is nothing that irks big companies more in the video gaming industry than the fact that one copy of a game can circulate on eBay Inc (NASDAQ:EBAY) among several different owners without them ever getting a cent. Of course, the gaming community loves this, and rightfully so, and many would argue that people do not sell on great games that receive significant developer support, they play them continually on a long-term basis, and simply don’t want to sell them. The argument goes that it is only inferior titles which end up circulating like wildfire on Ebay, and that if the video gaming industry is sore about not making any money out of this then they should look to improve the quality of their own product.

While this view of gamers is not entirely accurate, it is fair to say that charging a significant amount of money for the right to run a disc on a console is not a very palatable concept either. Sony has, it must be said, played a blinder on this one, taking the moral high ground by insisting throughout the build up to the Playstation 4 that they had no intention of mirroring Microsoft Corporation (NASDAQ:MSFT)’s attitude to pre-owned games. This notion alone has seen them gain a huge amount of goodwill from the gaming community.

In reality, the launch of the Playstation Now service indicates that they have certainly contemplated a future in which physical media and hardware is either marginalized or defunct. With cloud services improving rapidly, the potential for video games to be run as an on demand only service will become ever more logistically possible in the future. And a cloud-based gaming model will certainly be preferable for gaming developers, who have shown with some of the micro-transaction models that they’re rather fond of making money after a game is released!

Cloud gaming will come sooner rather than later, but companies will always listen to consumers. If gamers wish to retain some control over how they consume their media, now is the time to make a big noise in favor of disc-based games.