OnLive CEO does live demo, launch details 'soon'

DICE 2010: Founder & CEO Steve Perlman puts ambitious game-streaming network through its paces, explains why game consoles and physical media are doomed by a culture of "instant gratification."

Who is the consumer of today? According to OnLive founder and CEO Steve Perlman, it's Eric Cartman. To introduce his DICE Summit keynote address titled "Instant Gratification: Video Games In The 'Now' Era," the executive showed the clip of the corpulent South Park character having a conniption outside a retailer while waiting for the Wii to come out.

Steve Perlman

"That's the consumer of today," said Perlman, "They want everything right now."

To prove his point, Perlman said that 26.6 percent of all Internet traffic was "real-time entertainment" in 2009--more than double the 12.6 percent share it had in 2008. This is mostly off video-streaming sites such as YouTube and Hulu. But if Perlman has his way, the mix will soon include games via the OnLive game-streaming service, which remains in closed beta testing.

Knowing many business leaders were in the audience, Perlman began his presentation by explaining what happened to industries that were caught unprepared by digital delivery and the ensuing "now" culture. Music was the first "now" medium and suffered since record labels weren't ready for Napster and others when they arrived around the turn of the century. Pirate sites became so prevalent that downloading pirated media became more convenient than buying legit media. Movies and video are in the midst of the transition away from physical media now. Film studios had a better plan but are still getting clobbered by pirate sites.

To prevent the game industry from a similar fate, Perlman urged the audience to abandon the "OldThink," where a device defined a media. He said fewer and fewer people are asking questions such as "What CD is playing?" or commenting "We're watching a DVD tonight." "NewThink" has people describe the band, since most everyone doesn't even listen to CDs anymore. Hardly anything is watched on live television anymore, contended Perlman, with video clips being sampled on YouTube and Hulu, as well as television networks' sites. (He conspicuously did not mention TiVo or other DVRs.)

The OnLive microconsole and controller.

Perlman went on to say that physical media-based video is in rapid decline, with only interim growth in rentals like Netflix and Redbox. He contended that downloaded media is also past its peak, and even BitTorrent downloads are on the decline. Streaming media is now the majority of all Internet traffic via sites like YouTube and Hulu, but online "linear media"--that is, noninteractive--is a loss-leader for business. Apple says its iTunes and App store are "just over break even," and the company makes its real money on software and hardware. He contended Netflix gives away online videos at no additional cost, but still makes money off its physical-disc subscriptions. YouTube continues to lose money over three years after Google bought it for $1.65 billion, he said.

Though these examples are clear, Perlman said video games are "a different beast than linear media." Players have to download a large file before they can start a game, which is most often tied to a specific playback device. Online games can't be pirated because they are constantly being verified by game companies' servers.

However, Perlman sees clouds on the horizon and pointed out that the game industry is also vulnerable to shifts in consumer habits. Used games continue to grow, with about one third of all US games sold being used, according to industry-research firm Wedbush. Flash and iPhone games provide near instant experiences, but at a fraction of the cost of regular games. Finally, as broadband connections increase number and speed, Perlman predicts online piracy will also--even though just minutes earlier he said BitTorrent downloads were going down.

The executive declared the way to monetize games in the "now" era is to give consumers what they want, when they want it. It is to deliver instant gameplay of high-quality games and eliminate the need for pricey specialized hardware. It is to offer games in smaller "bites"--episodic, short-form events. Finally, increased monetization will come from utilizing the Internet to mitigate piracy by designing games to require an online connection, much like Ubisoft recently announced it would do.

Naturally, Perlman believes the perfect platform for the "now" era is OnLive, which he claimed will offer the latest high-end titles available instantly for play on any device. As outlined in its introduction last March, OnLive doesn't require any expensive hardware--just a cheap converter box for televisions or software for PCs, Macs, and other devices. All the hardware is in the server farm, which is upgraded every six months. He also claimed OnLive's graphical capabilities are already much more powerful than that of the PlayStation 3 or Xbox 360, both of which use hardware that's four or five years old.

His sales pitch concluded, Perlman went on to describe how OnLive works. He turned on a small set-top box with the touch of a button to show off how the proprietary video compression algorithm provides low-latency video. The key is making the system work over most households' broadband connection. Standard-definition video requires 1.5 megabits--an easy task, given that over 70 percent of US homes have a connection that is 2 megabits or higher. High-definition video will require 5 megabits of data--a much taller order.

How OnLive should (ideally) work.

Currently, OnLive has beta-test server centers in Atlanta, Chicago, Dallas, the San Francisco Bay Area, and Washington, DC, each with a 1,000-mile range. Today's live demo, conducted by company COO Mike McGarvey, was done using the Bay Area server farm. The Xbox Live-like menu booted up in a few seconds, and the startup screen emphasized video with animated video icons like those of the PS3.

After showing how users can upload home video and save brag clips, McGarvey then accessed the game library and loaded Unreal Tournament III, a feat accomplished in under five seconds. The high-definition gameplay looked fluid and lag-free, and Perlman claimed it was being done over a standard cable connection. He also took Criterion's racing game Burnout Paradise on a similarly smooth spin and brought up a high-definition trailer for the upcoming Harry Potter and the Deathly Hallows in a matter of seconds. He also showed the spectator mode that will allow players to observe their friends playing games in real-time on their own screens and send supportive--or taunting--messages.

The one issue visible was some hiccups during a demo of Crysis, which showed some lag and choppiness. However, the issues were mitigated by the fact that the game was running on an iPhone, although it was unclear how it was being controlled.

Running late and preventing Activision Blizzard CEO Bobby Kotick from starting his presentation--never a good idea when trying to win publisher support--Perlman rapidly wrapped up. He declared that the "games market is ripe for OnLive," saying it would break the console cycle and break publishers' dependency on retailers. The same SKU will run on a TV, PC, and Mac, so it will offer better returns to publishers than games that must be developed separately for every console. OnLive will also let publishers track gameplay statistics for their market research.

"If we don't create [an OnLive], the rest of the world will create one for us," he declared, before promising details about the service's launch "soon."

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207 comments
gideonkain
gideonkain

It sounds really exciting, but also impossible..so it will probably come up somewhere in the middle...so, underwhelming? The CEO can sure talk, but he does seem to dance around the questions. Nobody seems to be selling OnLive to my parents with crazy buzzwords like "cloud computing" - the one second in that video that I liked is how he described making video games "pure media" like movies - it would be nice to not have to worry about RROD or Antialiasing 2/VSync/Bloom,etc --and whether you should shame the programmer or your rig when there's screen tearing. ^^

DvTJonahHex
DvTJonahHex

Forget the hardware. Ok. What about the gameplay? I'll talk UT3 because that's what I know. What if I want to play a TDM game, then I decide I want to switch to Greed? Are ALL of the user-made custom maps and characters going to be available...whereever and however I want to play? What about UT3's voting to change maps and gametypes? Can I vote to turn the Titan mutator on and off? With all of the various ways UT3 can be configured with gametypes, mutators, custom content, etc, will I have a choice of several dozen, if not several hundred, different UT3 game servers? If not, the UT3 community will look at this and respond with "pffffffftttttt."

retroguy02
retroguy02

By the time this thing is actually doable on a large scale (at least 2-3 years from now) I'm sure that high-end gaming PCs will be affordable for the average gamer. So it still bothers me who'd get this. Maybe the breed who are both hardcore gamers and even more hardcore Mac nuts.

killing_spree20
killing_spree20

I hope this fails harder than a man trying to reach the moon on stilts. Internet fees, subscription fees, buy games you'll never actually own...I can't even describe how much I hate this idea. I like going to a shop and browsing games and then buying one...it builds anticipation. It makes playing the game all that more worthwhile.

RADCRASH02
RADCRASH02

IN this article they make it sound like this is not going to work. Well if you sell out like this site obviously has then your right it wont. But ignorance also wont help us find new advancements it will only keep us from getting there. To limit yourself to think that there's only one way to do everything will undoubtedly slow down our progress and perhaps hurt us in the long run.

oflow
oflow

This wont work until ppl have direct fiber to their homes. Most people currently have semi decent high speed connections at best. Might work in heavily poluated areas but a good portion of the people in the US live in rural communities that barely have access to high speed. Good try though. BTW I work in the plant side of a major cable provider, and realistically this wont work until people have fiberoptics in their houses. Cable/DSL wont be able to really handle something like this and make it work consistently. Anyone that uses On-demand on their cable box knows what i'm talking about.

Hydrolix
Hydrolix

IF this works as advertised it will revolutionize the industry. Unfortunately, I don't think it will. 8 million people bought modern warfare 2 in the first 24 hours. I can't imagine any kind of a scenario where something like that wouldn't break OnLive down.

Gungnir66
Gungnir66

Mr. Perlman, I don't buy this. What about Gamestop stores? And video game sections in major retail stores? And local game stores? Do you really believe you can put them all out of business? I understand that IF your OnLive service became successful, it would be a several-year process, but seriously... ...what about collector's editon games? ...what about your controller design - will it be good enough for FPS's? ...what about the people WITHOUT internet access? ...what about developer/console COMPETITION, which helps ensure that we, as gamers, get QUALITY games? ...what about gaming collectors? ...what about LAG...'cause if there is any kind of consistent lag, this service will not be worth it to the hardcore gamer. ...what about...fill in the blank? Small problems are not much by themselves, but an abundance of them can cripple even the largest of giants. So, Mr. Perlman, to you I say this - props if you get your service up and running, but this gamer here sometimes likes to just take a look around in his little gaming room and smile at what has acquired over the years...and thoughts of the many new games he will add to his collection.

gruby2
gruby2

another topic it fails to address is : what will happen with the gpu and pcu manufacturers. If u think about it, the main thing that is powering and feeding the gaming industry (apart from consumers) are companies like nvidia, ati, intel.... so comparing game publishers with record labels is completely off... And i doubt that gpu developers would allow their market 2 disappear over night.

mpeg3s
mpeg3s

This thing is at least 20 years too soon! Onlive with be TOAST before it takes off. In addtion, I wouldn't buy anything without detailed SLA with money back satisfaction terms. Onlive is not GAMBLING my $$$s on 720p lag!

lyncer777
lyncer777

so what will happen to the biggest video card/GPU companies like NVIDIA and ATI? Im not going to support this sorry... i love modding my PC and customize it...

BTroxell
BTroxell

I would never use this in place of an already established proprietary device as they can provide a more solid and reliable experience; but for less established and often varied gaming entertainment platforms such as the pc, mac, and portable media devices I believe it is a welcome addition and can really focus those into a more organized and user friendly medium -pc,mac-.

joejaybate
joejaybate

@ Gloryfinder I agree with you, to some degree, that Physically owning something feels better but that is because it's what we're used to. This man is talking some bollocks to try to get people onboard but the idea itself is innovative and will probably be the direction things will progress more and more. When we have the trust in these things being Owned by use even though we can't hold them, it will become the accepted standard. I believe this will happen eventually because it's the most effective way for people to receive media. Which is the reason as to why music/films are received this way so much today. This coupled with the fact that game hardware machines need constant updating (consoles and PCs) means it is almost a certainty. Will it be soon with this technology and this company, who knows. The deciding factor to it's success will undoubtedly be LAG. If they have a server hub up to the task of sending out even the most graphically demanding games, it doesn't matter if you can't interact with them in a seamless manner. This will one day not be a problem with more developed comm' tech' but today is still an issue. It may very well be able to function well as described with the local hubs (not sure about 1000miles though). So if you don't live near a major city it will still take a long time to filter out near you. Broadband will have to be present and, as someone said, with ISPs with no capping in transfer amounts or even speeds.

PvtRyan3
PvtRyan3

How much does the service cost? and When will it be available to the consumer? Two very important questions this article fails to address.

Glade_Gnarr
Glade_Gnarr

This will go down like the dreamcast, or it can crush all and put an end to the console wars, but it can't just be another platform.

just_nonplussed
just_nonplussed

thanks. i've been compared to eric cartman. an ugly, obese, immature moron from stupid town. thanks! /sarcasm

fatpumba3
fatpumba3

Come back in 10-20 years everyone will be ready for it then.

scottyg_20
scottyg_20

give it up this will never work right. plus what does the huge number of people do who have bandwidth caps!!!! lol... waste of time

dowyson
dowyson

First off I have to disagree with the moronic CEO of UBI soft for slagging his customers. I would say the industry is more of a "You want it now" as opposed to society being "I want it now" because if they want it... they'll get it when it comes out. Don't tell me you want to put it out faster to please the consumer it's being done to move units faster. They create the need and the want. Who needs a teaser trailer for a game coming out in 4 years for crying out loud. As I purchase almost every PC game these days through Steam all I have to say is wait and see. I hated the idea of Steam when it first started. Now I have no idea why it's model hasn't been used by more distributors? I mean especially Itunes!! At least if my comptuer goes ZAP! and I have no backup I can always log into steam and say reload my games. Itunes unless you have it backed up you are SOL. I would be interested to see how many DL from steam can be turned into pirated copies though as you can play your games while offline (except for Valve Games I think unless they have changed/fixed that.) I just tried Dragon Age earlier after reading this to find out if my connection went down if I could continue to lose weeks playing that game. so even if the apocalypse hits, as lnog as I have a battery back for my computer I can still play Dragon Age while the world falls apart around me.

Gloryfinder
Gloryfinder

If OnLive fails to make money and shuts down, what will you have to show for it in the end? Nothing because everything you paid for was virtual. Yes you will most likely enjoy it while you have it, but if it fails or you stay paying the subscription, then you can never play any of those games again because they were all temporary. Unless the subscription is insanely cheap where it wouldn't matter much anyways, I don't see this as being a viable way to sell games. Most people enjoy having a physical copy of something so they can play it again 10 years later because they still own it. With this, you'll technically never own anything, you're just paying for the right to temporarily play a game. Now I'm not saying this company will completely fail, it just wont become the basis for all gamers like they're making it seem. This will most likely turn into a video game renting system (sorta like Netflix, but with video games and no mailing things) which would work fine. Maybe you can go rent the console and controller with your monthly subscription. Once you're done trying out some different games, then you can easily take it back again. I want to physically own games I like, but I wouldn't mind using this service to try out some games to see if I like them or not before actually purchasing if the cost is low enough.

RadicalToenail
RadicalToenail

I could see this working in a couple of years when almost everyone has a super highspeed internet connection, but it would still mostly be for the console gamers.

My biggest concern is what happens with modding and playing with mods. Sure, you'd be able to play Crysis, but would you be able to have the tons of fun that I have with the Sandbox2 Editor? Would you be able to download and play with any of the mods that are out there for it?

I really don't have much of an issue with the digital distribution aspect of it though. I'm a Steam guy. I love my Steam. Except with this, not only do you not have a physical copy, but you also never actually own a game. It's like Gamefly (or Gametap). Once you stop paying for the service, it's all gone. You can't just suddenly pick it up again in a decade or two and play it again like I can with my old console or computer games.

I mostly hope this doesn't somehow effect me much (since everything seems to be slowly moving in this direction), but if there are people who want to give it a shot then go ahead. Just be warned that you'd practically be throwing money into a bottomless hole. You can't earn part of your money back when you're done with a game and no replayabilty when the service stops.

ricardo-sene
ricardo-sene

Expect a Nintendo OnLive, Microsoft XLive and Sony PSLive in the future...

shkar
shkar

damn it this is really bad for us gamers.....I mean I do really want to have a physical copy of my game....and also in other countries the internet is barely capable of browsing and this will disappoint many other gamers around the world.........I hope SONY and MICROSOFT have plans to stop this silly idea of the so called OnLife...

Titan_BG
Titan_BG

Are you people crazy, this is not the end of the world for all other publishers. They have money too and if this works as good as it sounds then they will quickly follow. That in summation is called progress and it is in essence what we want to achieve with both technology and video games please people like D_Streetz think before posting.

D_Streetz
D_Streetz

There needs to be a world wide boycott of this... in essence they are trying to shut down Sony MS Nintendo nVidia ATI and everyone else that provides hardware for games... THEY ARE TRYING TO MONOPOLIZE THE GAMING INDUSTRY AND THAT WILL KILL COMPETITION WHICH WILL ONLY HURT GAMERS IN THE LONG RUN!!

killing_spree20
killing_spree20

This is going to kill games. As far as I'm aware people like to have something for there money. Even if you use steam or D2D or whatever you still get all the files to keep and backup...with this we get nothing but a promise. Judgeing from what every developer and publisher say about their games and how much of it turns out to be true, their promises are all but worthless. GIVE ME DISKS! And I like bying hardware for my PC, its a quater of the fun in gaming for me.

lee1823
lee1823

Another thing to consider if this were to 'take over the world' is that assuming you can only play games that are hosted by the service. What about older games? Will they just dissapear forever? One thing i love when, say, upgrading my pc or rooting through bargain bin 360 games, is playing older games that i missed first time around.

NoLifeGamin
NoLifeGamin

Well people, we'll finally know when the final product is released. Until then, sit tight and hope at least you won't have to throw this into the dumpster, because that would be a waste of space.

lee1823
lee1823

'games market is ripe for onlive' not judging from the comments on here mr scary eyes perlman! There will always be a market for physical media. I detest the throwaway culture that these executives seem to think is so much in demand. watching a bit of youtube or streaming movies/music are slightly different from streaming a game. I have an 8meg connection but only receive about 5 due to my location.... which is in a built up suburb. I can't see many people getting a flawless service from onlive. I will use the internet to play my games.... byu ordering them and waiting for them to drop onto my doormat thanks.

leeko_link
leeko_link

Playing virtual games that I'm not gonna own to which how long I don't know will last is not something I would pay for. I would still check it out but not in the same excitement like what I had for the real things.

liam82517
liam82517

ask yourself one question, how many gigs do I get per month from my ISP before being overcharged or cutoff?

Joshluvhalo
Joshluvhalo

I enjoy being able to open that plastic wrap from a fresh new game that I spent my hard earned money on. Downloading a game doesn't satisfy me that much. And then I wouldn't even have the game with Onlive, they would, I would just be borrowing it. If you unsubscribe you would lose all your games too. That seems like a mood killer.

Psikosis
Psikosis

Oh yeah, almost forgot the obvious: details have been "coming soon" for over a year. At what point will they be renaming it "OnPhantom"?

Psikosis
Psikosis

I heard about Ubisoft's new DRM and I was just wondering "How could I have even less control of my games?" Then along came OnLive. Seriously, where is the market for this money pit of a project? First, it only works at conventions under very controlled conditions. Reports from beta testers have been negative. Second, there's no flock of gamers waiting out there for 'something' to satisfy their gaming needs. If you're a gamer, you probably already own 2 or 3 consoles plus a PC and portable device. Technical problems/limitations plus weak graphics plus no market = epic fail. Take a lesson from Sony's PSPgo: any product you make has to have people willing to buy it and OnLive has no market niche and nothing to offer gamers they don't already have.

Rasenganfan2
Rasenganfan2

Woah, what the? I think, in some ways, it could be cool. However, I prefer my pysical media, thank you. Also, he called his games short. I don't want all my games to be short. There's gotta be some long games on there, maybe an RPG similar to Chrono Trigger or Final Fantasy?

TheBatFreak777
TheBatFreak777

I'm particularly curious how much the monthly fee is going to be.

To_Ashes
To_Ashes

There is many reason why this product will possibly fall under the big market out there... One reason is in such a gaming community and battles... Such as Microsoft, Sony, and Nintendo. To have some competitor come out of the blue and say... "Streaming the game is now the future..." Hey, so be it... But its like medicine... The world has the cure out there for many diseases... But they don't deliver... They still sell the medicine as of the cure. Why is that? The reason is marketing would collapse if they just sent out the "Cure" for all things... There would be no money made in the process... I just feel OnLive has this type of inertia... They wouldn't let a product like this that sounds too good to be true to go out to the public cause it would cause mass marketing downfall for gaming... Even if I would stick to consoles even so... But casual gamers of the world wouldn't bother putting a CD in there system ever again... -This is all opinion, no facts.-

Hvac0120
Hvac0120

It's also confusing because they say there will be a monthly fee, but that you have to pay for the games. How much is the subscription? And now that you have subscribed, how much are they going to charge you to play the game? What happens when the service is down or I can't afford my internet bill for a month? I have to stop gaming all together? OnLive likes to promote like their way is the only way, but we all know that it will take a LONG transition period before the move to complete digital download and/or streaming is the only option.

Hvac0120
Hvac0120

@TheBatFreak777 on resell... I agree that resell is very important to a consumer. If things go digital it wouldn't to be the end of consumer resell. It would just mean that resell would have to be handled differently. My suggestion for digital resell is through licensing. Via an online vendor, people can sell their digital license. The vendor can then provide "in-store" credit or post cash to the selling consumers bank account. Then the vendor can resell the license at a lower cost on the internet to another consumer. If Publishers/Developers are concerned with this, then they should be the people who handle the second-hand licensing. If they control this, then they are getting all the second-hand monies that are transferred. I'm not going to go any deeper than that, but there are ways to do it. Resell can be good for Publishers, Developers and console manufacturers too. By selling our old games, we collect money to spend on new games. So, it's not always a "loss" as they always seem to promote.

clqtte
clqtte

I don't think it will work for me........

shabulia
shabulia

If it works, then it will be the future of gaming. If not, I'll just get the PS4.

lordsidius
lordsidius

Blah, blah, blah. Just like communism, it's a great idea, in theory that is. The real world application is something very different. This guy is a dreamer, albeit a very vivid one. I'll stick with my consoles for now thank you.

mr_squibble
mr_squibble

Maybe OnLive is the reason why Midway games have disappeared on XBOX Live Marketplace? But how much will OnLive cost? Besides server reliability and internet speeds, the cost could be the real barrier to adoption. Oh yeah, and the games available to play on it.

TheoleDominion
TheoleDominion

Unless their offering their own internet service and guarantee, this will fail. At least with most games on the physical disc, if MW2 server or your internet service tanks, you can still play "local team and death-match, Spec Ops mode, or campaign mode. You still have off-line OPTIONS, if this service fails in anyway, you have NONE.

brendanhunt1
brendanhunt1

"Hardly anything is watched on live television anymore, contended Perlman" ???

Ladiesman17
Ladiesman17

@aGiantSquirrel I'm doing a lot "comment-wars" between PCs vs X360 & PS3,, It's very fun to make others angry.. you right.. LoL.. :D

aGiantSquirrel
aGiantSquirrel

So, No more consoles, nothing, no more competition... Rather, Onlive wants to Monopolize the gaming market and get rid of Microsoft, Sony, and Nintendo in the Console competition, just like that. What do they expect, that the day OnLive comes out, we're going to throw away our consoles and games for their service that does their thing over the internet only. Good Luck. But the console war thing is just too much fun. Cant get rid of that, lol.

Ladiesman17
Ladiesman17

@CaptainHerlock Hell...Don't get me wrong.. I still like physical Hardware but for Software = nope.. I prefer Virtual Datas (On my PCs HDD) & Box Covers inside Media Center.. than on 1 truck cupboard containing massive DisC... I like playing games without constantly changing Disc... I'm sooooo lazzzyyy... LoL.. :)