TECHNOLOGY : ONLIVE may never make it ?

Why ON-LIVE will not be a console killer.

Don't get me wrong I am all for progress and service, how ever I'm not sure they even believe they can do it.

After giving this some thought and going over some basics here is my view on this topic

1.Realistically the technology wont be available and ready for the masses till 2012 to 2015. You can read about this all over the web.

They plan to start in the US and what will happen is you get the early adopters going through the pain barriers and as long as the game play is not interrupted more than once may be just may be people will accept it.

But remember game play can not be interrupted, How many times does You Tube or other low quality stream slow down or stop on your PC. I am sure the demos worked amazing and they planned well for that at GDC....but wait till you have several hundred thousand people all wanting the same game at a very slightly different time.

So assuming that some people do stick with the service and they grow slowly they will not be making any money and will require more and more funding. They got around $12 million in 2007 for a second round.


2. The investment is pure speculation

So investors and future VC's will speculate based on the management background and the chance of this delivering a huge pay off....and that they could get control of or a big chunk of control of the video game industry right? Wrong they may at best get a share of the market. But this is where I don't think they are really interested, my gut tells me they are trying to convince people they have the best compression technology and hope that a huge company buys the IP for a tonne of cash.

3. Are you forgetting those other small companies in the industry?

Yes little Microsoft, quite shy Nintendo and that big sissy Sony......do you really think they will lie down and just give up and say yes you win....we don't care about the billions we invested in making this industry happen.....

Not a chance, here is what could happen.....all of the above companies launch similar services or HYBRIDS of the service like PS3 lite or XBOX lite (Microsoft already sells a lite version for XBLA) So part processing happens on line and the rest in home.

And or the Hardware just gets cheaper and cheaper......(historically this is what happens and is happening)

All of these companies have massive installed base across USA, Europe & Japan. As for Asia they don't have the bandwidth yet so forget Onlive for China's or India for the next 2 to 3 years.

4. The installed PC base

Who are your customers? well the ones with a PC or a TV who want to play high quality games. I am going to assume that people who invested in consoles are not the target. Also I would question if the PC owners who have great or decent spec machine at home and play games are the target either.

So are you after the 85 million online gamers in the USA from 2008 (stats provided by comscore) Then you need to take into account the number of women in that figure was around 45 to 48 % and then take into account age demographics and your target audience is reduced further.

My guess is they will also try to leverage deals with the cable providers and try to get into peoples homes through the TV.

Good idea? progress right. Sure choice is great.

Ok high quality games require high quality peripherals so if you play on the TV and want to compete with the consoles you will need:

Rockband Kit
Microphones
Dance Mat
Driving Wheel
Wii type contoller
Guitar

So all of a sudden we are in the family home and the choice is streaming games with no peripherals, less game choices or by a Wii or play the one we have. fun of what the above can provide. Hummm (please tell me If I got this wrong and you can just plug in to a port on the

5.NO exclusive content....

its nothing new just a new distribution method. Its not like they have Little big planet, GTA or Crash Bandicoute or Matrix or some amazing game to launch this service they just offer the same.

6. The future of gaming

Its all about how you can enhance your experience through community and better peripherals making controlling a game easier, expanding choice of titles (like casual)and all the big companies are way along with this process in addition to that they are offering better distribution models, Episodic content etc.....

If Onlive truly have amazing technology they will end up selling it or becoming like DOLBY and licensing it. They will not lead the games industry or have any chance of killing off the others.

I do believe in this technology and cloud computing will become the norm but at very best Onlive will sit way behind the others , but I can not see them making it as a replacement for PS3, XBLA or Nintendo.

Love to hear your thoughts please comment....

Here is some good reading

Onlive was a dumb investment

Dave Perry s take on things

Console sales data

Venture Beat

Venture beat ( read all the postings at the bottom of the page)

Crytek story

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