OnLive, Cloud Graphics, and Why Gaming Needs Faster Internet

Fri, Aug 31, 2012

Console, Free-to-Play, Funding, Industry, PC

Back when OnLive was first announced, I remember reading the editorials in PC Gamer magazine and the skeptical, sometimes frustrated comments on the forums. The community asked a question: “Of what use is my big, expensive gaming PC or console if all I need to play high-quality games is some off-site server?”

That’s the basic premise of OnLive. A gamer logs on, connects to a server operating a network of graphically powerful computers, and streaming gaming arrives straight to the customer’s monitor. You can do this on conceivably any system with an internet connection, even a tablet.

It’s a novel, forward-thinking idea. But one forum poster summed it up perfectly over a year ago. “It is impossible to stream games over the internet without input lag.”

Kotaku confirmed on August 17 that OnLive is filing for bankruptcy. Although the company has been bought out by a third party, the soul of OnLive is going to likely come to a close.

According to Engadget the reason for the failure of OnLive appears to rest on massive debt and operating costs and not enough revenue. While they had a great idea to support cloud-based gaming, they didn’t have enough paying customers to contend with their tremendous overhead.

Was the market simply not ready for cloud-based gaming? Or is it like what the above forum poster mentioned; a matter of bandwidth, and not enough of it?

Eurogamer’s Richard Leadbetter followed OnLive since its announcement in 2009. In a 2010 article, Leadbetter praised the concept as a whole but took serious issue with the lag in streaming gameplay: “Despite the incredible achievement in streaming gameplay with relatively low latency, the bottom line is that the gameplay experience is not better than what we already have—by and large it’s tangibly worse.” In an article earlier this month, Leadbetter issued his final word: “As much as (OnLive founder) Steve Perlman would tell us that this was a viable replacement for the current generation of home consoles, by virtually every quantifiable criteria OnLive offers a sub-optimal means to play the exact same games you can already enjoy elsewhere.”

OnLive claimed to offer a better experience than any console or PC with dedicated graphics. Unfortunately it never panned out for the company, but by no means should the concept of cloud-gaming be disregarded. What if OnLive attracted more customers? With the extra revenue, could the company have improved its streaming quality? They could have tried, I suppose, but ultimately it is the customer’s own internet connection that has the final word over the kind of gameplay they receive.

As Leadbetter wrote, most of OnLive’s prospective users do not enjoy the luxury of a connection with plenty of bandwidth. I’ve never had such a luxury, but it’s never been a problem for me because I’ve never needed my connection to handle streaming graphics. I’ve got an Nvidia GPU for that, and it works like a charm and only cost me $150. (The rest of the rig cost me considerably more, but hey, what can I say? I’m an enthusiast.) Even my crappy Time Warner speeds could still get me and my trusted rig online for multi-player games. And even though more and more single-player PC games require persistent online connections (we’re looking at you, Diablo III), I’m certain my connection can also handle those.

So did OnLive just launch too early? No one knows when ultra-speedy internet connections will roll out to the masses. As a nation, the U.S. still has plenty to consider about infrastructure before making high-speed internet a reality. There are difficult obstacles to contend with, such as the harsh truth that Netflix streaming takes up a staggering 32 percent of U.S. bandwidth during peak hours. Ultimately, the success of cloud gaming relies on the bandwidth infrastructure available, and the idea won’t fully take off until connections speed up by a significant margin.

But that’s not stopping OnLive just yet. Where will it go from here? The company isn’t officially dead, and will probably pivot as many internet ventures tend to do. (Did you know YouTube used to be for online dating?) This is pure speculation, but perhaps OnLive may choose to fully embrace the free-to-play option like many companies are doing these days. And if you take a look at OnLive’s core structure, you see a digital distribution platform that can offer third-party games. It could attempt to go toe-to-toe with Steam as EA has done with Origin or Ubisoft hopes to do with UPlay.

OnLive has a struggle ahead of it, especially when you consider the strategic launch of Square Enix’s Core Online service, which just arrived this past week and is currently taking sign-ups. It’s a free-to-play service that launches inside your web browser and will offer classic titles like Hitman and Tomb Raider. Google hopped on board this project as well, offering their Native Client that taps into an offsite computer to render the graphics. Sounds familiar.

But at what point will we return to the difficult place where OnLive currently finds itself? Square Enix may have some heavy-hitting Google resources on its side, but consumer bandwidth is still an issue. But then again … Google is currently testing out super-fast connections in Kansas City. Perhaps OnLive should move their company headquarters there.

Cloud gaming can be a reality and I believe it should be. I may have spent a considerable amount of money beefing up my gaming rig, but I have to acknowledge that the future of gaming is allowing more people to play for less money. For that, you need to consider radical options for rendering 3D graphics, and OnLive’s Steve Perlman made a bold attempt. We just need to wait a little bit longer and allow internet speeds to catch up with the ambitions of visionaries and the future for which gaming is destined.

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