OnLive: Top games streamed to your TV

By Daniel Terdiman on 24 March 2009, 11:19am

A start-up called OnLive announced a brand-new games distribution system on Monday night that, if it works as planned, could change the games industry forever -- by cutting out the console.

OnLive, which was started by WebTV founder Steve Perlman and former Eidos CEO Mike McGarvey, is aiming to launch a system that will digitally distribute the latest AAA games from publishers such as Electronic Arts, Take-Two, Ubisoft and Atari. Seven years in the works, OnLive is designed to stream games on-demand, at the highest quality, to any Intel-based Mac or PC running XP or Vista, regardless of how powerful the computer is.

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

Based in San Francisco, OnLive timed its formal unveiling for 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.

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 1.5Mbps connection, and for hi-def, 5Mbps.

That's obviously an essential feature, as no one would pay 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 UK's sister site News.com did see a real-time presentation of OnLive on at least two different computers and an HD TV. 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, similar to Xbox Live, 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.

From the outset, OnLive isn't partnering with any of the first-party publishers -- Microsoft, Sony and Nintendo -- meaning that franchises such as Halo or Zelda won't be available. Those companies all have online services of their own and are hardly likely to want to help a new competitor.

And for the nine third-party publishers who have so far committed to being involved, McGarvey said, OnLive presents a much more efficient and profitable distribution model than the standard retail structure. That's because the system is all digital, cutting down on physical distribution costs, and because it's designed to eradicate piracy and second-hand sales, both of which are banes of the publishers' existence.

As is always the case with brand-new and publicly unavailable technology, it's far too early to know whether the company or the service can live up to its promise. But if its demo is any indication, OnLive is definitely on to something, and given that the company has been in stealth mode for so many years, it's possible the console makers will be caught off guard.