$40 million dollar investment from HTC, the Taiwanese titan that's been making some killer Android phones. This could be an interesting move if it brings streaming games onto Android phones, and that's what HTC is looking for. First OnLive has cut a deal to get into Vizio TVs, now getting into smartphones. If they can't use this to leverage some more content deals with game publishers, they should just give up.
Of course, there are many practical issues to deal with when considering games being streamed onto smartphones. It's not clear at all how OnLive will deal with them. First off is bandwidth; OnLive demands a pretty healthy bandwidth for its service through a TV set, but then again that's at high resolution. With a phone screen they should be able to dial it back to a lower bandwidth requirement... but how will that compare to 3G? Will it require 4G?
Second, the control requirements will mean some degree of workaround. Phones won't have joysticks, analog or otherwise, nor control buttons or D-pads. Mapping those onto a small touchscreen is possible, but certainly not optimal or practical for many games. Will they need to provide some kind of Bluetooth accessory to handle this?
Finally, is this going to be something just for HTC phones? Will it require additional hardware, or is it just a software add-on that can be updated for existing phones that meet the specs? And what kind of pricing will this have?
Some of these answers may emerge at GDC. Until they do, it's hard to say what impact this will or will not have. Potentially, though, it could allow big publishers to have some games seen on smartphones that might otherwise never make it there.