OnLive to Take Videos Games to the Cloud

A new cloud computing-based video game service promises dramatic change in an industry that, until now, has been based on constant hardware upgrades. Rather than force consumers to buy an expensive new video game console or beefy gaming PC, newcomer OnLive promises to deliver next-generation gaming over broadband connections via existing PCs or an inexpensive new micro-console. If it's successful, OnLive could destroy the gaming market as we now know it but free consumers to spend money on—get this—just the actual gaming experience.

OnLive is the brainchild of Steve Perlman, and if there's anyone out there who understands the intricacies of delivering digital media content over networks, it's him: Perlman was a key player in the design of Apple's QuickTime technology and WebTV, the latter of which was eventually purchased by Microsoft.

"OnLive rocks, it is just the most awesome thing," Perlman says, pointing out how the system is a (sorry) game-changer. "With OnLive, when a publisher has a new game, at any level of development, they can just [beta test with a group of players online] and refine game play in a way that was never possible before."

OnLive is an upcoming subscription service that will offer first-tier video games to consumers via their PCs (including laptops) or Macs. Optionally, you'll be able to purchase a tiny micro-console that attaches to your TV, letting you experience HD-resolution games on your best display. The micro-console makes even a Nintendo Wii look complex by comparison; it features two USB ports for standard joysticks and controllers, video/audio out ports, and network and power connections. OnLive will also provide its own low-latency wireless controller.

"The service isn't for everyone," Perlman admits. "If you don't have a fast Internet connection into your home, this is not the service for you. But if you do have a decent connection into your home, you'll see [an online gaming experience] that is very comparable to that of a high-end gaming PC." Perlman points to games such as Crysis, which demands very high-end PCs. Crysis runs just fine over OnLive, meaning that users with low-end PCs and Macs, which couldn't normally run the game, will be able to finally do so without upgrading their hardware.

On paper, the OnLive business model makes sense, but there are questions about the viability of delivering games solely over broadband in real time. However, the company has signed major video game publishers to ship games for the service, including Eidos, Electronic Arts, Epic, Take Two, and Ubisoft, among others. These publishers have agreed to ship games for the OnLive system simultaneously with shipping them for the PC and traditional video games consoles.

It's hard to overstate how dramatically OnLive could affect the video game industry. Today, a wide range of companies—from hardware manufacturers such as ATI/AMD, Intel, NVIDIA, and others—supply PC users with an array of products aimed specifically at video gamers. Console makers devote years of R&D and billions of dollars into producing next-generation console systems and associated services. And consumers spend millions of dollars each year upgrading PCs and buying new consoles. OnLive could put an end to all that, eventually. For now, Perlman is being conservative and saying that OnLive will be "additive" for PC gamers at first.

"OnLive will expand the market for games," Perlman says, noting that the company is opening to partnering with console makers if there's interest. "Who knows? The future is really, really bright but there's been nothing like this before—nothing even close—and who knows what it's going to lead to?"

OnLive has yet to announce pricing but says there will be a "basic access fee" for accessing the service, as well as separate "tiers of pricing for accessing games." Customers won't "buy" games as they do currently but will rather subscribe to games, or packages of games, for set amounts of time. The service is set to launch in "winter 2009" but will be available this summer via a beta test. Check out the OnLive website for more information.