In its second-largest acquisition, Amazon buys the company for $970 million.
The deal will enable Sony to develop a web-based service for gamers.
Sony Computer Entertainment will buy Gaikai Inc., which operates a web-hosted platform through which consumers stream video games. Sony Computer Entertainment, which sells PlayStation gaming consoles and related gear, will pay $380 million for Gaikai.
The acquisition of Gaikai will enable Sony to develop a web-hosted, or cloud, gaming service.
"By combining Gaikai's resources including its technological strength and engineering talent with SCE's extensive game platform knowledge and experience, SCE will provide users with unparalleled cloud entertainment experiences," says Andrew House, president and group CEO of Sony Computer Entertainment. "SCE will deliver a world-class cloud-streaming service that allows users to instantly enjoy a broad array of content ranging from immersive core games with rich graphics to casual content anytime, anywhere on a variety of Internet-connected devices."
Gaikai launched in 2008 and is based in California.
Sony Computer Entertainment is part of Sony Corp., No. 16 in the Internet Retailer Top 500 Guide.