Sony has announced the PlayStation Now cloud gaming service that will let you stream PlayStation games to the PS4, PS3, PlayStation Vita, TVs, tablets, and smartphones.
Sony was able to launch the service after acquiring cloud gaming company Gaikai in June 2012. The full service will be able to rent games or pay for a subscription that lets them explore a range of titles. Sony is going to launch in closed beta in the U.S. at the end of the month.
The games are stored in powerful in data centers to run the games. You can stream compressed video frames of that game running to your local devices. The input from your touchscreen or game controller is sent to the servers.
The PlayStation Now service will be rolling out first to the PS4 and PS3. This will be followed by the PlayStation Vita handheld and most 2014 U.S. models of the Sony Bravia TVs.
[Source: TheVerge/PlayStation Blog]