IBM and startup Butterfly.net Inc. have built a global network for online video games. The "Butterfly Grid," which took two years to develop, is one of the first major commercial applications of IBM's architecture for grid computing, a concept in which a network of high-powered computer servers acts as one supercomputer for intensive data processing. The game grid, powered by rack-mounted Linux-based IBM eServer xSeries systems, has the potential to accommodate millions of simultaneous users, compared with the hundreds of thousands of players supported on current networks.

Butterfly.net, based in Shepherdstown, W.Va., will provide the software development kits to build consoles and PC games that can plug into the network and will take a cut of the fees that game publishers charge online players. Under the terms of the three-year capacity-on-demand contract, IBM is providing the hardware and physical space for running the network, while Butterfly is supplying the software. "We believe the Butterfly Grid is a breakthrough platform that will help entertainment, media, and game companies reduce costs and better deploy their entertainment properties online," Scott Penberthy, VP of business development for IBM Global Services, said in a statement.

Grid computing could reduce the cost and complexity of hosting online games. Game publishers maintain hundreds of servers to avoid overloading computers and causing performance delays. The demand for online gaming is expected to increase by the end of the year, when Microsoft and Sony Corp., which make Xbox and PlayStation 2 consoles, respectively, plan to go online.