The service, which is expected to launch in the winter, was unveiled Tuesday at the Game Developers Conference. The demonstration showed how it streams 3-D games from a data server to the consumer using proprietary compression techniques. A Macintosh or Windows user would first need to download a 1-MB browser plug-in, but it potentially enables users to play games with high-end visuals without the need for expensive graphics cards or strong processors. Games can be played with the keyboard and mouse, a standard USB controller, or OnLive's proprietary wireless controller.
The company also will offer a "MicroConsole" that will bring this service to a user's TV through an HDMI connection. The MicroConsole will have to be connected to a high-speed Internet connection, and the company said games will start in a matter of seconds as the majority of processing is done on OnLive's server.
"We're providing you with the latest high-end titles, the exact same ones you would see at Target or Best Buy, in the same release windows. But what is really cool is you don't need any high-end hardware to play them," OnLive founder Steve Perlman said Tuesday.
For gamers, the service potentially gives them access to top-shelf games without having to invest in new hardware or consoles. The company said it has been working on the technology for more than seven years to ensure that the service has very little latency. OnLive said it plans to improve its back-end servers in the future to handle increasingly complex games.
For the game publishers, the service could open the door for another revenue stream without the costs of shipping and manufacturing games on disks. The service already has the backing of Atari, Eidos, Electronic Arts, Take-Two Interactive Software, THQ, Ubisoft, and Warner Bros. Interactive Entertainment. These companies plan to launch titles on OnLive at the same time as the console and PC counterparts.
The cost and functionality ultimately will determine if the OnLive service can displace the likes of Nintendo's Wii, Sony's PlayStation 3, and Microsoft's Xbox 360 in the gaming space. OnLive users will be able to pay a monthly subscription fee, virtually purchase games, or a buy a multiday rental for a price to be determined later.
The market is getting crowded with Web-based software and storage offerings. InformationWeek has published an independent analysis of this topic. Download the report here (registration required).