Remote game services (OnLive, Gaikai, etc.)

[Bohdy]

Onlive might serve as a catalyst for the reinvention of the current videogame business model, but for now it's more likely to prove unable to gather the necessary momentum before it collapses. What lies beyond the tech has always been the more interesting aspect of it, but the implementation still remains to be the groundwork without which it can't realize its potential. The infrastructure fails to keep up with the concept so far, and the investors may not have the patience and money to keep it going until it becomes self-sustaining.

Also, there's the great risk that it turns out to be a dead-end, with people preferring to own their games in a more physical form and on more fixed terms. But to find it out, they still have to build it first...

My gosh that's a pessimistic outlook you have there.

I think that OnLive has already been 'a success' considering the nature of the technology (the concept has been proven to 'work' despite all the doubt), and it will only get bigger from there. But of course time will tell.

 

[patsu]

I think the big companies will continue to experiment and flirt with the concept. I like NetFlix's approach the best (Build a profitable business first based on what works, then convert the base over). In their case, the same business model unifies physical, download and streaming content. You need very good focus to stomach the initial operation headache and fend off impatient analysts though.

Aggressive and deep-pocket companies like Microsoft have already built out the sophisticated backend infrastructure. They will lure and wait for consumers to warm up to the concept over time since they leap all the way to the end.

Pure play startups like OnLive and others will keep doing what they specialize in. Hopefully they have enough cash flow to last all the way.

 

[flynn]

Onlive is the kind of service that could help solve that piracy problems on the PC. I'm sure many pubs are interested in something like this.

 

[aaronspink]

Onlive might serve as a catalyst for the reinvention of the current videogame business model, but for now it's more likely to prove unable to gather the necessary momentum before it collapses. What lies beyond the tech has always been the more interesting aspect of it, but the implementation still remains to be the groundwork without which it can't realize its potential. The infrastructure fails to keep up with the concept so far, and the investors may not have the patience and money to keep it going until it becomes self-sustaining.

If doesn't help that their compression quality is pathetic.

Also, there's the great risk that it turns out to be a dead-end, with people preferring to own their games in a more physical form and on more fixed terms. But to find it out, they still have to build it first...

I'm pretty sure their pricing model is a dead end. Honestly, I'm not sure there is anything that is salvageable from their tech.

 

[aaronspink]

My gosh that's a pessimistic outlook you have there.

I think that OnLive has already been 'a success' considering the nature of the technology (the concept has been proven to 'work' despite all the doubt), and it will only get bigger from there. But of course time will tell.

A success? They deliver crappy quality for a realistic cost that is more than to buy the consoles and rent the games.

 

[aaronspink]

Onlive is the kind of service that could help solve that piracy problems on the PC. I'm sure many pubs are interested in something like this.

I know another way to solve piracy problems: don't make anything and don't sell anything. Well its not really another way, its effectively the same way just with lower costs.

The jury has already spoken on both the onlive model and the always connected model and its a no.

 

[Shifty Geezer]

I think that OnLive has already been 'a success' considering the nature of the technology (the concept has been proven to 'work' despite all the doubt), and it will only get bigger from there. But of course time will tell.

Successes have to be measured against criteria. An inability to maintain a stable, workable income is a failure of a business model and a company built on that is a failure, meaning no-one else is likely to follow. You can count one success with OnLive delivering low latency compared to what people feared, but their claims of revolutionary video encoding were bunk, and the end result is the same as any other video stream, which is another failure. Finally the costs mean it's more economical to buy a console and games, so OnLive doesn't find success there either.

As proof of concept, one could argue OnLive has shown the way, but the future possibilities were always there for cloud computing and server-based streamed content. Unless OnLive gains significant traction, all it'll have done is show cloud computing doesn't work now, without bringing anything new to the discussion of cloud computing in the future.

 

[Bohdy]

Successes have to be measured against criteria. An inability to maintain a stable, workable income is a failure of a business model and a company built on that is a failure, meaning no-one else is likely to follow.

Exactly right, but wouldn't you say that it's a bit too early in the day to pass judgment on the success or failure of OnLive's business model?

You can count one success with OnLive delivering low latency compared to what people feared, but their claims of revolutionary video encoding were bunk, and the end result is the same as any other video stream, which is another failure. Finally the costs mean it's more economical to buy a console and games, so OnLive doesn't find success there either.

How were the video encoding claims bunk? Because the final quality is still poorer than you were expecting? The revolutionary aspect that they were talking about was always the low-latency of encoding/decoding and the error handling without a feedback loop (because it would be too slow to re-request misrouted packets). I very much doubt that you can confidently say that another technology would perform better given the same requirements.

And how is the cost a failure? The current pricing model is that the first year is free! And the figure that they have currently committed to for an ongoing monthly fee is $5. I'd like to see you buy a console for the equivalent of $60 over two years!
Or is your information still so out of date that you are referring to the initially quoted 'worst-case' figure of $15 which they are _not_ going to be charging?

But yes the success that I was referring to was the proof of concept that the technology can work, and it can work right now. Yes it's not good enough for hardcore gamers, but then OnLive was was always targeted more at the mainstream, where there is no reason that it won't succeed because the quality standards are quite simply much lower.

But like I said, time will tell. It is still extremely early days yet, and I just think that it's premature to write the thing off with that same conceited tech pundit gusto that wrote off the wii, and the ds, and ... well need I say more.

 

[Silent_Buddha]

You can count one success with OnLive delivering low latency compared to what people feared, but their claims of revolutionary video encoding were bunk, and the end result is the same as any other video stream, which is another failure.

I'm not quite sure I'd count that as a success either as it's still a far cry from their sub 50 ms latency claims. At best, I wouldn't count it a failure, which doesn't equate to success.

Exactly right, but wouldn't you say that it's a bit too early in the day to pass judgment on the success or failure of OnLive's business model?

Nobody has made claims about it's success or failure as a business model. Pretty much everyone doubts there will be any success however, which is different than saying it's failed.

Most of us are still waiting to see how things will play out. But at the same time, many of us don't expect it to last. I'll actually be a bit surprised if the services lasts for 1-2 years.

And how is the cost a failure? The current pricing model is that the first year is free! And the figure that they have currently committed to for an ongoing monthly fee is $5. I'd like to see you buy a console for the equivalent of $60 over two years!
Or is your information still so out of date that you are referring to the initially quoted 'worst-case' figure of $15 which they are _not_ going to be charging?

That 5 USD per month is ONLY for the Founding members program if they continue their subscription after the initial free year. Once that program is discontinued it'll be ~15 USD per month.

Considering a console generation lasts 5-10 years, @5 years that would be 300 USD for founding members and 900 USD for others. @10 years that would be 600 USD for founders and 1800 USD for others. That's far more than the cost of a console. Oh and throw in the price of a computer that you can play it on. Say 300 USD for a netbook. Yup, that's really price competitive all right.

But yes the success that I was referring to was the proof of concept that the technology can work, and it can work right now. Yes it's not good enough for hardcore gamers, but then OnLive was was always targeted more at the mainstream, where there is no reason that it won't succeed because the quality standards are quite simply much lower.

Hard to target the mainstream when you need relatively high bandwidth for blurry low quality visuals and somewhat playable latency. Especially when the most common broadband connection in NA remains 1.5 Mbit. And the largest provider of high bandwidth remains cable companies who generally have a data cap which you'll surpass fairly quickly if you do much playing.

But like I said, time will tell. It is still extremely early days yet, and I just think that it's premature to write the thing off with that same conceited tech pundit gusto that wrote off the wii, and the ds, and ... well need I say more.

Yes, it's too early to write them off, they may have some surprises up their sleeves that actually does make this a compelling choice for anything other than a small niche, but I remain unconvinced.

Regards,
SB

 

[Bohdy]

That 5 USD per month is ONLY for the Founding members program if they continue their subscription after the initial free year. Once that program is discontinued it'll be ~15 USD per month.

That's not true.

Quotes from cnet's Steve Perlman interview: http://news.cnet.com/8301-17938_105-20010687-1.html

Steve: It's not going to be that expensive. As a start-up we have to be completely cautious about what we promise in terms of monthly costs. In March, everyone wanted to know the worst-case number, so we said $14.95. We knew it was going to be less than that.
...
If you take the worst-case scenario, then we'd have to charge $14.95. It assumed that everybody was getting on at the exact same peak hour.
...
It means our worst fears about worst case peak loads turned out to be unfounded, and we're able to charge a much lower price. [currently said to be $4.95 a month]

True he doesn't spell it out for you, but all of his post-launch pricing comments indicate that they will be charging less than $15 for subscription. I don't know if the $5/m will last, but it will be less than $15.

If you read the whole interview they have a lot of ideas for revenue streams that aren't just from the subscription.

 

[Laa-Yosh]

I'm not talking about Onlive's success as the underlying tech, I'm talking about it as a business. We don't know anything about the size of capital involved but it's safe to say that they'll need at least a couple million active subscribers to break even. I don't see that many people willing to play for what the tests so far have demonstrated it to be.

 

[Bohdy]

I'm not talking about Onlive's success as the underlying tech, I'm talking about it as a business. We don't know anything about the size of capital involved but it's safe to say that they'll need at least a couple million active subscribers to break even. I don't see that many people willing to play for what the tests so far have demonstrated it to be.

On the topic of breaking even, Perlman has said that they are currently growing users at a rate far faster than projected. Considering that these projection are usually based on the road map to breaking even and satisfying their investors (it's not like they would make a projection based on their failure), it's food for thought...

 

[corduroygt]

Only on high end laptops. Otherwise resolution is still dominated by 768p and 800p for notebooks and 600p for netbooks.

1080p and 900p are still fairly rare unless you get into expensive gaming notebooks where it's somewhat more common.

Regards,
SB

Depends on screen size, it's fairly easy to find those resolutions at the 15"+ class, which is too big and heavy for my tastes. 14" has the new hp envy 14 and the discontinued models of the vaio cw for 900p displays. Unfortunately, I don't want anything more than a 13" and the only laptop that gives >768p at 13" is the stupidly expensive vaio Z that I'm definitely not buying at that price, so I just make do with a 13" asus with its 768p resolution and hook it up to my 1080p monitor at home, but sometimes I need the extra resolution when I'm travelling...

Someone please put the vaio Z screen on a reasonably priced laptop without the non-proprietary SSD so I can use the one I already bought...

 

[Arwin]

Well, it's not for me yet, but I can definitely see it has promise, just like Instant Action / Gaikai. I think this is going to work. Using this gaming could become like watching TV.

I think I would personally never want it to replace disc-based or digital download 100% though - apart from not being good enough right now for a number of applications, or even comparatively inefficient compared to downloading an executable to your system and then running it locally, it would basically mean that games could disappear from 'prime-time' and then can never be played again. I think there should be a law that any game can somehow be preserved in a library with the possibility to check it out and play it. Sure, that's hard for MMOs, but let's not make it even harder.

Digital Download has similar downsides, but OnLive games look like they may disappear in 2 years even. As everything is server based, it seems more expensive comparatively to keep older games available.

 

[patsu]

http://gamasutra.com/view/news/3076...ive_Throws_Out_Monthly_FeeBased_Biz_Model.php

Cloud-based gaming service OnLive said Monday that it would revamp a key component of its business model, and not charge monthly fees for the service.

With no monthly fees, OnLive hopes its service is more accessible and inviting to users. "The key thing for us is keeping it free simplifies our pricing structure so it is entirely based on games rather than on access," OnLive CEO Steve Perlman told Gamasutra.

"We actually got the first indication that the business could be supported without a monthly fee when we let beta testers start purchasing games before we launched the service," said Perlman. "But, because it was beta, we weren't certain what usage patterns would be at scale [after the service launched]."

…

"Since the monthly fee was always a sliding 1 year away with the Founders Program, users did not give it much thought, "he said. "We surveyed users and almost everyone was fine with a $4.95 monthly fee (e.g. it's similar to Xbox Live's fee), but you can't really know until you get closer to actually pricing it there. "

OnLive said that it would mark the confirmation of no subscription fees with a new, ongoing free trial program that gives users access to the service with no credit card required to create an account.

 

[RancidLunchmeat]

That's a step in the right direction.

Now all they need to do is get the per-play cost down to .25, and we'll be living the dream!

 

[Flux]

1.5 mbit for SD, and 5mbit for HD [according to ggmania]. Its not so bad, but my main concern is latency. I think everything below 60-70ms is totaly acceptable IMO.


I would like to try it, i hope there will be some free trial.

They need regional servers to solve that problem.

 

[Flux]

These guys are geniuses.

 

[patsu]

Not OnLive specific... but online gaming:
http://gamasutra.com/view/news/30807/GDC_Online_Game_Makers_Need_To_Adapt_To_New_Markets_Or_Die.php

With all of these new businesses coming up, more traditional game makers should not write off these trends, Perry said. He likened game designers to rock stars –- they need to evolve to stay relevant. "If you can't accept that social gaming is here, I think you'll be done. ... Are you evolving, or aren't you?"

 

[patsu]

Another one, more related to social network gaming:

Survey Finds Significant Overlap Between Console, Social, Mobile Gamers
http://gamasutra.com/view/news/3080...rlap_Between_Console_Social_Mobile_Gamers.php

A newly released survey of video game usage in the U.S. and U.K. shows traditional PC and console gamers increasingly expanding their gaming horizons with games on social networks and mobile devices.

Newzoo's National Gamers Survey for 2010 categorizes the estimated 160 million gamers in the U.S. and 32.5 million gamers in the U.K.* into seven non-exclusive groups based on what platforms they use to play games: console (including portable consoles), MMOs, PC/Mac (boxed), PC/Mac (digital), online casual, social networks, and mobile devices (including the iPod Touch and iPad).

The breakdown shows that consoles still represent the most popular platforms for gamers, with 56% of all U.S. respondents and 62% of all British respondents saying they played games on TV-based or portable gaming systems.

But these traditional gamers aren't above expanding their horizons to new types of games. Newzoo's data shows that, in the U.S., 56% of console gamers also play games on mobile devices, with 59% playing on social networks and 40% playing MMOs. The results are similar in the U.K., where 66% of console gamers play on mobile devices, 56% play games on social networks and 34% play MMOs.

...