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OnLive is a new on-demand video game platform, announced at the Game Developers Conference in 2009. If it works as well as the developers and investors are hoping, it will without doubt revolutionise the games industry. Onlive wants to introduce technology that will allow everyone who has a decent broadband connection to play the newest games available with all the eye candy. It will reduce hardware and driver compatibility quirks as well as the distinction between "PC" and "console"
Their technology will allow you to play games on any computer regardless of your hardware specifications, PC or Mac, as long as it can play video. There is even a cheap solution for TV.
OnLive will sell a console called the "MicroConsole". Once connected to a TV you will have direct access to the OnLive service this will allow people to play games without even owning a computer.
How is it done?
A powerful server based system – files, games, profiles, processing, and rendering is all done on the server. The server will send you what is essentially an interactive video. The input from your controller is sent to Onlive to be processed like in any other online game. If you use their MicroConsole it will support up to four wireless controllers and four Bluetooth headsets. It also has a USB port for keyboards and mice.
The server takes care of all the computational and graphical grunt work it then compresses each frame of action in almost real time to deliver a video stream via your broadband connection. OnLive operates at 720p60, which is a 60 frames-per-second video format. They have developed a custom compression technology that will make the service possible and at this point it seems Standard-Definition TV resolution needs a 1.5 Mbps connection, HDTV resolution (720p60) requires about 5 Mbps. The OnLive video encoder has an amazing 1 ms latency This means for the 60 frames per second 720p video stream each frame is processed, rendered, compressed and sent to you in at the most 16.7ms (1000ms = 1 second)
To accomplish all this they need facilities to house large servers and associated hardware, there are facilities already in Santa Clara, CA and Virginia. One is in the process of being fitted out in Texas.It is claimed users must be located within 1,000 miles of one of these to receive a high quality service
The benefits.
It will deliver "instant on" play by eliminating lengthy software downloads, remove increasing storage requirements from your console or PC and obsolete region coding and intrusive digital rights management (DRM) that has been nothing but a headache for gamers. No more scratched CD’s or lost serial numbers.
Additionally it should equalize the end-game experience. Expensive computer components won’t be required to play the newest games and due to the game being processed and rendered on the server there will be almost no ability to cheat or hack the game, good bye Punkbuster.
Every game will become a demo. “Free play” days, demos and other promotions will be trivial for the company to control as they control the games and your access to them. Onlive will apply the patches, upgrades and configuration the only thing you will have to worry about is being t-bagged.
Significant publishers have already signed up to Onlive.
Electronic Arts, Take-Two, Ubisoft, Epic Games, Atari, Codemasters, THQ, Warner Bros., 2D Boy and Eidos Interactive have agreed to make their PC games available on the service. If it all goes to plan Onlive will see more publishers and perhaps even some exclusive games because Onlive has something publishers desperately want. -A content publishing system that has no manufacture costs and is pirate proof. If you don’t have physical media or even access to the files that make up the game then you can’t pirate it.
So Onlive is good for the consumer then ?
Sort of, we don’t know their pricing strategy yet and there are a few other considerations such as privacy and real cost.
They say the service is going to be cheap, but what a company says is cheap and what the consumer believes is cheap are two different things.
This service will probably have a subscription fee plus the price of games. (this is speculation based on what the company reps have said).
Consider this.
You don’t own anything, no media, no license, nothing. You are just renting time on a server and the game publishers are providing the reason for you to rent that time. (the game). If the service dies you lose the product you “purchased”. If it is a subscription sevice, and you can't afford your monthly subscription you lose the product you “purchased”.
You are only renting server time.
If they launch with a subscription fee I predict that the subscription fee will be abandoned within 2 years.
Competition from other services in the same field will force them to provide the service for free, only charging for game rentals after paying an initial set up or hardware fee. Two announced competitors are Gaikai and OTOY
Way back befor there was blue-ray, dvd's or even the internet there was the VCR. Video libraries, when they first launched, charged a monthly, bi-annual or yearly fee in addition to the rental cost of a movie.
Video libraries were not very common, there was very little competition so they could get away with charging a $150 yearly fee plus an overnight rental charge of $6 per movie.(holey crap I am old)
Onlive is not a way to actually buy a game, it’s a rental service. Very much like a high tech DVD library, except in this case you need to pay for your bandwidth as well. Can you see the publishers reducing their prices to match the cost of a weekly DVD rental?
They won’t but they should here is why.
As was said above you are only buying time on a server.
It will increase their revenue by enticing casual gamers. Hardcore gamers will be more inclined to "taste" games weekly.
Publishers are going to increase profit and save a metric ton of money.
It is unlikely they will allow the sale or transfer of your account, or any of your accounts games, to another account. Goodbye secondary games market. If they don't reduce prices significantly many gamers wont bite.
The games will have reduced value. Mods like skins, levels, vehicles and maps may not be available unless OnLive puts up "development" servers. (unlikely) The mod community will be unable to create and offer mods as all the game data will be stored on the OnLive servers, without access to the game files you can’t make a mod. This will detract from the allure to PC gamers particularly . Lower costs will off set this.
Expect hidden costs, companies like EA will be salivating over the prospect of “selling” additional content previously offered by the mod scene.
Real cost- You are paying for the band width.
OnLive promises to make the prettiest settings a reality for all , but sending 720p pictures across a 5Mbps minimum broadband link in real-time will bite into your broadband budget. Playing 2 hours a night for a month on a 5Mbs connection will use about 100GB. For those of us who don’t watch TV, and games are our primary source of entertainment this may pose a problem. Some ISP’s will shape your connection after a certain volume of data has been downloaded. If it is rolled out to places like Australia, your ISP probably doesn't even give you a 100Mb allocation for the month.
In an ideal world there would be no monthly fee, it would be swallowed by the publishers who will eventually pay more than they are comfortable with to have their games added to the Onlive service (fee or royalty) so they in turn can charge rental fees to the consumer.
Publishers pay more than they are comfortable with to be included?
Sounds crazy but that is what will happen eventually and the publishers know it... a lot of big names are on that list of companies offering their early support for an unproven technology. They are getting in early while it is cheap and while they can still influence its growth.
I say this because piracy and publishing costs will be reduced dramatically. Packaging, materials and punkbuster will cease to be a cost factor. Publishers will save money and increase profits by selling additional content and successful games will almost without doubt incorporate advertising. Development costs for games will reduce as the games won’t need to be ported to multiple consoles, PC or Mac.
It is an all round win for the games industry.(well except for Xbox and Playstation)
No matter what Onlive intends the service to be at the moment , in the future their bussiness model will have to adapt. The addition of competition will change the game
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