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Gaikai and the Display-over-IP Revolution

NEA recently invested in Gaikai, a company that is revolutionizing high-fidelity, interactive content delivery with its "Display-over-IP" technology. The company is creating tremendous buzz in the gaming industry by enabling consumers to play high-end, 3D, interactive video games in real time over a network - no console, no downloads, just immediate, highest-quality access through a web browser. Gaikai actually launched the first-ever 3D game on YouTube this fall with EA's FIFA 2012, giving their audience a chance to demo the game instantly within the web browser.

This is an incredible technological achievement for Gaikai (more on that in a moment), and it's particularly exciting to some NEA partners who have been anticipating the leap to display-over-IP technology for a long time. Way back in 2005, NEA's Greg Papadopoulos gave a lecture at MIT, envisioning a future where an ultra-thin client would be able to access high performance CPUs in the cloud. Essentially, Greg predicted that the local machine would no longer be a gating factor in determining how a user would experience the most intensive applications, such as gaming and high-end software.

Unknown to the audience until his very last slide, Greg's entire lecture was being sourced from a prototype thin-client server in a data center several states away. Greg had something that looked like a laptop in the lecture hall in Boston, but it was not running any application, it was simply decoding the video streams from the remote server. Of course, the only 'twitch' was advancing the slide, and nobody noticed the second-level latency of that. Greg, on the other hand, was sweating, afraid that his display-over-IP experiment would completely crash before the punch line.

Since 2005, some of the remarkable companies in NEA's portfolio have helped the network progress incredibly fast over the past few years, not just in bandwidth, but the very low latency required to "close the loop" around an immersive 3D game. This is an area where Gaikai has made huge innovations and the talented team is mastering something fundamentally important. They had the vision when they founded the company to see that right about now that the network would be ready for real time interactive 3D gaming if they were to forward invest in some (awesome) technology to pound out latency - latency that is amazingly the same as running a game on a local gaming console. This is the extraordinary "leap" that Gaikai lets us make as you can see from the graph below.

Gamers have long been frustrated by how complicated it is to demo games before buying and how those cinematic trailers never translate into gameplay. There are two big issues: one, the need to constantly upgrade hardware to have the best experience and run the latest games, which is very expensive; and two, those upgrades requires gigabytes of downloading, which takes hours. Gaikai lets consumers demo instantly through an existing browser.

The team is unlocking a completely new experience for delivery of real-time, high-quality content. We're excited about the future where the most intensive applications are running right through the browser regardless of the native client's hardware or which devices happen to be accessible at that moment in time. The increasing commoditization of bandwidth to all of these devices is driving tremendous innovation, and NEA is thrilled to play a role in transforming the way people access and experience rich content and applications.