Cloud gaming has the potential to completely disrupt today's video game industry, but there are currently obstacles that will keep the format from being a dominant force in the near-term, according Cevat Yerli, CEO of Frankfurt-based Crysis developer Crytek.
"Gaikai as well as OnLive, they're pioneers in that [area]. But I also think that [current cloud gaming solutions] can be dangerous in a way, from a business perspective," he told Gamasutra at E3. "...I have concerns about the way it's approached, but I think cloud gaming is the future, inevitably."
Gaikai and OnLive both have networks that are up and running which implement remote servers that host games that are playable nearly instantly through web browsers, without a download.
While both use comparable technologies, they have different business models -- OnLive has a consumer-facing online storefront, while Gaikai works with publishers to deliver instant demos of their games through web ads. Yerli said he believes Gaikai has the better, more sustainable model.
Yerli said new advancements and new companies "will overcome business issues and scalability issues" with cloud gaming. "But those platforms right now, they inherently have scalability issues," he said.
Gaikai demoed Crysis 2 running on high-performance servers at E3 behind closed doors. Gamasutra played the game on Gaikai, and it had minimal latency and 720p graphics.
But Yerli said it's not optimized for the cloud, and future cloud games will need to be built from the ground up with cloud gaming in mind.
"Crysis 2 isn't built to be scaled on a cloud. Crysis 2 is not a cloud game. Crysis 2 is a client-based game that is running on a cloud. And yes, it has the benefit of that scalability on the client side, but it is inefficient on the server side, because it's not meant to be on a cloud."
"Until this is overcome, and people build proper cloud games, this will always be a business issue," he said.
Gamasutra will have more from Crytek in the coming days.