July 2, 2012 / 5:26 PM / 5 years ago

UPDATE 1-Sony to buy U.S. game firm Gaikai for $380 mln

* Deal to close by the end of August-Sony

* Sony to create Internet cloud games service

By Malathi Nayak and Liana B. Baker

San Francisco, July 2 (Reuters) - Sony Corp said on Monday it would buy the privately held California-based gaming firm Gaikai Inc for about $380 million as the money-losing electronics maker seeks to strengthen its online gaming services.

Founded in 2008, Gaikai, based in Aliso Viejo, California, is a cloud gaming firm that provides technology to stream video game content directly to any Internet-connected device. It competes with OnLive, another U.S. cloud gaming company.

A Sony spokesman said the deal was subject to regulatory approval and was expected to close by the end of August.

The $78.5 billion global video game industry is witnessing a shift from console-based games to online titles on Web-based devices.

Andrew House, president of Sony Computer Entertainment, said in a statement that the acquisition would help Sony create a cloud gaming 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."

The Gaikai technology is expected to enhance Sony's gaming console, the PlayStation, which connects to the Internet but also allows plays games on physical discs.

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