A revolutionary idea...

When I first heard about Onlive, it was a jaw dropping moment. I distinctly remember having the thought: can they really DO that? As a cautious consumer, I've always followed the basic tenet that if it sounds too good to be true, it probably is. The startup company's basic idea of cloud computing meets gaming would be several orders of magnitude beyond what anyone had ever experienced on the web. More importantly I realized, it could end up doing for games what Netflix does for movies. Prior to the company's March 2009 public unveiling, the video game industry had perpetually been bogged down by one crucial stumbling block: hardware. At the dawn of the virtual gaming era computer hardware was so expensive that games had to be featured at arcades. Pac-man anyone? It was only in these specialized hubs that the games could reach a broad enough audience to turn a profit. Eventually personal consoles became available to the average consumer, but their entry price was steep.

While it certainly wasn't the first, take for instance, the 1986 North American release of the Nintendo Entertainment system. It featured a standard console that retailed for $250.90 and a deluxe version that cost $482.67 (adjusted for inflation). Video game consoles have always represented a significant monetary investment, one that requires consumers to advance an extra several hundred dollars just for the privilege of being able to play a particular set of games. Its arguable that the problem has worsened in recent years as game developers increasingly look to peripherals as a way to nickel and dime their customer base. Whether or not its wise to shell out the cash for a fake guitar, fake set of drums, fake skateboard, or fake tennis racket is another story though.

Even worse, personal computers have represented a particularly nasty battleground when it comes to the arms race for gaming hardware. Entire markets have emerged just to cater to "hardcore gamers" looking for the ultimate system. Companies like Alienware currently offer desktops that are priced in the same ballpark as used cars. It's a bit ridiculous, but even I was admittedly once part of that system. Back in the mid 2000s I was buying video games that I thought would be so much fun to play, only to have them crash my computer because of their high graphics requirements. I bought a new desktop specifically to play those graphically intense games (like flight simulators), but it wasn't a few months before newer and better games came out making my PC outdated again. Even as I took the begrudging trip back to the store to buy a beefy $300 graphics card, I knew it would only be a temporary fix. Gamers everywhere are faced with this perpetual cycle of upgrading, a necessary price to pay for top-notch entertainment.

Never again?

Onlive set out to turn that idea on its head. Their simple philosophy seemed impossible to realize: remove hardware from the equation, let the player stream a game over the internet to any kind of device they want, from PC's to TVs to Macs, even ipads and phones are in the works The gamer would simply need a decent internet connection and computer fast enough to make it more useful than a doorstop. Vocal skeptics initially scoffed at the idea and said it would flop. Nerds everywhere got downright giddy at the thought it would it could work. Onlive initially remained extremely secretive about pricing models, and some people speculated that access to the service would be limiting and near $40 a month. Looking back, I probably would have paid at least $25 a month just for the access alone. But Onlive surprised nearly everyone by unveiling a reasonably priced $15 a month access fee. I was immediately hooked, and signed up in eager anticipation for the launch date. June of 2010 finally came and to cut a long story short, Onlive worked brilliantly. The high end games like Just Cause 2, Borderlands, Assassin's Creed, and Dirt 2 were coming through quite well on my crappy low end laptop. Early on there were a few hiccups with connecting, but never something that left me irritated or couldn't simply be fixed with a refresh. All in all though, I was extremely impressed that these games (which couldn't possibly be experienced on my computer otherwise) were being streamed to my computer from a remote server hundreds of miles away. The lag was imperceptible, Onlive had done it.

But the part that continuously amazes me is just how much they cater to their customer base. I might have expected a couple of nice offers from any fledgling startup, but Onlive blew me away.

• Even after I would have gladly paid an access fee, they made their game streaming network free for the first year.
• Then this fall Onlive said "heck with it" and said there would be no access fee, it would be free for everyone indefinitely
• Even after I would have gladly paid full price for any game, they've given me 3 free games (no strings attached)
• At every holiday, from the 4th of July to Halloween to thanksgiving and random weekends, Onlive keeps having these sales that mark down their games up to 75% off.
• They've hosted several contests where gamers can win prizes (like an ipad)
• They recently introduced a microconsole, essentially a TV-remote sized device that directly connects your television to deliver 1080p resolution quality without the need for a computer. Priced at $99 bucks.
• Even after I would have gladly forked over a Benjamin for the microconsole (essentially the last hardware upgrade I'd ever need to buy) Onlive gave it to me for free as one of their founding members, plus another free game just for thanks.

And then perhaps most exciting, just today I received an update explaining that they're going to offer flat rate access to their full game library as an option. Never mind the fact that you can do free demos or instantly buy and play any game, now you can skip the part of having to choose to buy or not. To me, the price was pretty economical, $9.99 a month for unlimited access. Considering the fact that a single new console game alone for Xbox, Wii, or PS3 can retail for $50-60, Onlive is a no brainer for anyone with a yearly gaming budget of more than $120.

Pros and Cons, but getting better all the time

Admittedly, the Onlive service is still new. The biggest drawback is that they currently "only" have 43 game titles available. The 2nd biggest drawback is that they don't have Crysis. Just kidding, but really its marked absence kind of sucks. My guess is that the critically acclaimed sci-fi 1st person shooter and its expansion pack, Crysis Wars, created too much of a worry over whether the game would crash its servers. (Crysis is notorious for being graphically intense and bringing many PC's to their knees) Indeed thats a question I continually ask myself as the service becomes more popular: will the traffic ever be too much to handle? I'd hedge my bets that they have it under control, and are more than ready to expand and accommodate more gamers. Onlive is building additional server locations in North America, is coming to Europe in 2011, and recently partnered with Equinix to help fortify their data-centers. If they ever go public in the stock market, I'd want to know.

Yet as Onlive's library of games becomes larger and ever more enticing, some inevitably question the impact this robust startup company will have on the gaming industry as a whole. Do they cater to a niche market? Or is their product by and far the best option for gamers everywhere? My guess is that the customer base is too broad and varied to capture for any one company. At the very least, Onlive has already proven that they're more than willing to be accessible. Since access is free, you could theoretically go to their website, download the minuscule applet right now, and begin sampling games immediately without even giving your credit card. If you have a decent internet connection, and live in North America I'd recommend giving it a shot. But it may not be time to jump ship on the current consoles either. The 3 longstanding giants of the video game industry-- Nintendo, Microsoft, and Sony--currently have a couple of undeniable advantages. A) Large and expansive game libraries B) Games involving motion sensing and peripherals. C) Possible legions of dedicated and loyal fan bases D) Exclusive rights to certain video game titles that are proprietary (Mario, Halo, Gran Turismo, etc.) These factors mean that Onlive has to make alot of headway before truly becoming a formidable competitor. Peripherals and motion detecting equipment could be a long way off, but if they already have an actual microconsole and controller out, hey anything is possible.

In the end, I think the competition will come down to one thing: content. Even if Onlive is able to offer most of the same popular titles as the big 3, they could easily attract a huge customer base with their unlimited access plan, always-in-stock guaruntee, and never-need-to-upgrade-again-philosophy. The reality is that independent publishers love Onlive's business model as well. Games are theoretically immune to pirating, consumers can instantly demo their product, there are no manufacturing/printing/shipping/stocking costs associated with distributing a game in the cloud, and oh yea Onlive actually compensates its publishers a higher percentage of the earnings.

Who benefits from all this?

• Consumers who couldn't afford to shell out the several hundred bucks to buy a PC or console from the big 3 can now go directly to the games
• Onlive, of course is making oodles of cash from all of this. They can really take this service and run with it, I wouldn't be surprised if they incorporated movies into the mix.
• Publishers and developers (especially for indie games) get a bigger cut per game with Onlive, can reach a wider audience (Mac users for instance) and their products can't be pirated. They also don't have to pay middlemen retailers like Gamestop or Walmart.
• Developers who make great games will undoubtedly see more success. Onlive incorporates scores from Metacritic and its own user base to let gamers know exactly which games are acclaimed, and which ones stink.
• Apple wins, albeit indirectly, because games are becoming more accessible on their notoriously unfriendly platform.

Who's taking a hit?

• Game retailers, particularly those that rely on used games, may see their product dry up if more games move to the cloud.
• Console makers (i.e. the Big 3) could see some of their customers opt out of purchasing their next big console. Perhaps they can keep up by making their own version of cloud gaming. Sony recently registered the trademark PScloud, Microsoft seems pretty adept at the cloud computing scene as well. The ability to stream games over the internet is something entirely different however, and Onlive is light years ahead.
• Gaming PC manufacturers like Alienware may see the same drop in sales as people realize they don't have to keep upgrading to enjoy the latest games. Best $4000 you never spent?
• Software Pirates will be unable to download and make illegal copies of the games on Onlive because they don't actually exist on the hard drive.
• Developers who make bad games may see the need to further refine their products. Buyer's remorse runs rampant in the video game industry. Just like M. Night Shyamalan's movies, some games turn out to be a costly waste of time. Gone are the days when a studio can turn a profit with a catchy marketing campaign a cool concept. With Onlive's free 30 minute demos, plus 3 and 5 day game passes, game studios will see a much more discriminating consumer that decides where to spend their money.
• Gakai, another cloud gaming company in the works is falling behind. Curiously they may be looking at an in-the-browser game demo service aimed at retailers hoping to maximize profits.
• Modders, or more accurately "people who mod games" will suffer a big blow if online gaming takes off. Since the copies of the game don't actually exist on the users computer, modders don't have access to the precious source files that, once manipulated, can turn a game into immortally awesome variations.

Bottom line? The game has changed.

*The major update is that literally a day after I wrote this article Onlive announced they would be bringing streaming movies to the service for 2011, undoubtedly sparking a content war with the myriad of service companies that aim to do the same thing. I had always been curious about this movie aspect for Onlive though, especially because in the "coming soon" section of their platform there's always been a Harry Potter 7 trailer floating around. It has nothing to do with a game either, its clearly just a trailer for a movie. Seeing as Warner Brother game studios is already partnered with Onlive to deliver some of their titles like (arguably best game on there, Batman's Arkane Asylum) I would be surprised if the movie division at Warner Bros secured HP-7 part 1 to be released there when it finally comes out on DVD. For me though, its just icing on an already delicious cake.

**Side note: I should also probably explain a little more about the $9.99 a month all you can eat plan. When I first heard about it I assumed (as many people did) that for a mere ten bucks a month I would be able to access all of the games on Onlive and never have to directly purchase one again. Not true. Onlive has created an almost separate section of what they call "PlayPack" games. There are currently 14 of them specifically, and by paying 10 bucks a month the user will have unlimited access to whatever titles appear there. Some of the games in the PlayPack bin are quite good, and aren't even available for purchase for a normal Onlive user. However, some of the games are also clearly the bottom of the barrel, like the game "Saw" which scored a 59/100 on Metacritic. But the reality is that some of these low scored games can actually have their fun moments. One of the most common complaints against "Saw" for instance, is that its a genuinely fun game that was too darn short, hence the bad reviews and the label that there's no bang for your buck. But hey, if its on the PlayPack list now I can try it out without fear of buyer's remorse. Additionally, I can see that many of the games here are the ones who are getting outdated and replaced by sequels. I actually like that idea alot, because instead of simply yanking a game off the shelves after a few years Onlive can keep it floating around in the all-you-can-eat section. Some of the older games, graphics aside, are really quite good. Its nice to know that I'll be able to hang on to these and they won't suddenly become unplayable due to backwards compatibility issues with the next-gen console.