OnLive: The Future of Gaming is Now

One of my high school buddies posted something about being “the belle of the ball” at the Game Developer’s Conference yesterday. I did a little FB research and found out she worked for OnLive. Never heard of it. This morning I was greeted by articles everywhere about OnLive, and now that I do read about it, I’ve developed the shakes.

OnLive just developed the Console Killer. And I couldn’t be happier about it.

As Daniel Terdiman from ZDNet tells it

It’s too early to tell how much danger, of course, but a start-up called OnLive announced a brand-new game distribution system Monday night that, if it works as planned, could change the games game forever.

OnLive, which was started by WebTV founder Steve Perlman and former Eidos CEO Mike McGarvey, is aiming to launch a system–seven years in the works–that will digitally distribute first-run, AAA games from publishers like Electronic Arts, Take-Two, Ubisoft, Atari, and others, all at the same time as those titles are released into retail channels. The system is designed to allow players to stream on-demand games at the highest quality onto any Intel-based Mac or PC running XP or Vista, regardless of how powerful the computer.

The system will also stream games directly to a TV via a small plug-in device, and players can use a custom wireless controller as well as VoIP headsets in conjunction with it.

Based here in San Francisco, OnLive timed its formal unveiling to this week’s Game Developers Conference, where it will be showcasing the technology and 16 initial games it will launch with.

The service is currently in a closed beta, but is expected to go into a public beta this summer, and to launch this winter.

According to Perlman, OnLive’s technology will make it possible to stream the games in such a manner–high quality, no matter what kind of system the user has–by virtue of a series of patented and patent-pending compression technologies. And instead of requiring users to download the games, OnLive will host them all and stream them from a series of the highest-end servers. Users will have only to download a 1MB plug-in to get the service up and running.

OnLive is hoping to capture a significant portion of the video game market share. In February, the industry posted one of its strongest months ever, with total sales of $1.47 billion, up 10 percent from a year ago. And in February, the Xbox, PS3 and Wii accounted for total sales of 1.42 million units.

An intended benefit of this infrastructure, Perlman and McGarvey explained, is that users will be able to play streamed games via OnLive with no lag, so long as their Internet connections meet minimum thresholds. For standard-definition play, that would mean a minimum 1.5 Mbps connection, and for high-def, 5 Mbps.

That’s obviously an essential feature, as it’s hard to imagine anyone paying for a service like OnLive, no matter what games are on offer, if the user experience is inadequate. But the company promises that as long as users have the requisite minimum hardware, operating systems, and Internet connections, they should be able to have seamless play.

The upshot of this infrastructure model, Perlman said, is that OnLive is somewhat future-proof, meaning that players won’t have to upgrade anything to keep on playing games on the system years into the future. Instead, the upgrades will happen on the back-end, with the company regularly boosting the power of the servers it uses to host and stream the games.

And while demos always have to be taken with a grain of salt, CNET News did see a real-time presentation of OnLive on at least two different computers and on a HD TV. Game play was as smooth and lag-free as advertised.

So far, OnLive has yet to make its business model public, but what seems likely is some form of subscription service, where players will pay a monthly access fee and then pay additional costs, depending on whether they want to play games once, or buy them for permanent play.

The rest of his article is here.