OnLive Gets 100th Game, Facebook Integration

OnLive has been busy working on new agreements, and at E3 they will be showcasing their 100th game, Red Faction: Armageddon, which will be their first exclusive PC demo. Now that the OnLive library has hit 100 (up from the 19 they launched with), it's going to have an easier time getting players to sign up. Which in turn should make it easier to get more games to join their library.

More important, perhaps, than the milestone of 100 games is the expanded integration with Facebook. OnLive is clearly planning to leverage the viral marketing aspects of Facebook games by integrating Facebook into their games. It's not just posting messages to your Wall, it's an attempt to add spectating, video clips, and other advanced features to all the games OnLive serves up, all plugged into your Facebook account.

Done properly, this could help OnLive get more new members as they leverage the social networks of their players. OnLive is also pushing a new SDK to enable developers to take full advantage of their Facebook integration.

Meanwhile, OnLive is also pushing into the UK this fall. I'm sure they will be looking at Europe soon after. PLus they have more announcements lined up for E3. They are putting out their story early, which is a smart move to avoid getting lost in the wave of announcements that will be coming out of E3.

While OnLive is trying hard, it seems to me their ultimate success is still in question. They've made it to 100 games, but their $9.95 a month all-you-can-eat service has about 50 games available. Otherwise, you can rent games for 3 days, or you can buy them. The advantage of buying them from OnLive as opposed to just getting them for your PC is that they will have the most high-end graphics available... though of course you will have to deal with potential lag issues. The 50 games on the service are not your most popular titles, of course. It remains to be seen if publishers will want to let OnLive get the rights to their most popular games.

The other issue is still the high bandwidth required for the service to work properly, and even then you can still get into lag situations. Perhaps these issues will be less important over time, but the marketplace is changing. Will OnLive adapt itself to what players want? It will be interesting to watch what happens.

OnLive Goes Android

OnLive is looking to spread itself far and wide, it seems. They've just gotten a $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.

OnLive Getting Livelier

OnLive has been forging ahead lately with some interesting deals. First off, they've added a flat-rate plan, which gets you all the games you can eat for $10 a month. This should help attract more users, especially those who like to sample a wide range of games. The sticking point right now is the game selection isn't huge; only a few dozen right now. Until that expands, the appeal of a flat-rate plan may be limited.

Which brings us to the next big deal. Or rather several big deals. OnLive secured a major patent on their technology in December, which will make it harder for competition to occur. They've hired away Pandora's COO Etienne Handman to serve as their COO, which will give OnLive some solid experience with streaming media and media companies other than games (if you're not familiar with Pandora, you should be). And last but certainly not least, OnLive has signed a big deal with Vizio, where Vizio will be building OnLive into a wide range of HDTV's, Blu-ray players, and tablets. This is a great feature for Vizio ("It's like having a console built in to your TV!) and will bring a slew of new potential subscribers to OnLive.

Hopefully OnLive can use these deals to leverage some more games out of publishers; they really need their service to be more populated. While I'm still rather skeptical of the service, given the technical limitations and the requirement for pretty high bandwidth, it's a good way to get first-run titles in front of a larger audience, which can benefit sales for the industry. As higher bandwidth becomes more available (someday!) the service will be more useful. The real test is in the next six months. If they can't succeed in signing up a lot more content in the near term, I don't think the service has much of a future.

The New Consoles That Could Shake The Industry

Could this box reshape the industry?

OnLive and Gaikai, two relatively new companies that are trying to reinvent the gaming industry will soon reach important milestones in their quest. What are they doing and what does it mean for the industry? It's cloud gaming, but their approaches are different from each other. Can one or both succeed?

I've been skeptical about OnLive since I first heard about it at GDC. The basic pitch was interesting: A service that could stream the most graphically intense games from any platform to your TV or computer screen (all the TV would need would be a simple, inexpensive box). You'd sign up for the service and then be able to buy from a wide variety of games, with no download times and no need to upgrade your system. The games would be run on OnLive's hardware, which would be far more powerful than most home systems. (Here's a good overview of the system from a few months ago.)

My skepticism was rooted in two technical barriers I saw. The problem of lag seemed to be an absolute technical barrier, and the amount of bandwidth needed to send a high-resolution screen seemed amazingly large. OnLive was able to come up with some nifty compression and worked to massage the network bottlenecks at every step, minimizing the latency and bandwidth issues. They had some good-looking demos, but of course that was in a controlled situation. Would it really work out in the wild?

Initial reports were good, but there were some issues. OnLive initially had a subscription fee as part of their plan, but quickly dropped it as it proved hard to get people to sign up for a fee and then still have to pay for the games. The bigger issue is still the limited number of titles (a couple of dozen right now), and the amount of bandwidth you need. If you want high-definition video, you're going to need a connection of 5 Mbps or greater... not something everybody has.

Now the most important component is about to ship: The OnLive Game System, a $99 box you hook into your TV and the Internet. Assuming you have a beefy enough connection, you just pick up the controller and start playing. The real battle for OnLive's future is about to begin. Can they sell enough of these boxes to create a viable installed base? And can they sign up enough games to attract an audience?

Here's an early hands-on review, and the verdict is good. One of the cool features cited is the fact that you can just buy a 3-day pass to a game for about $7, or a 5-day pass for $9, as well as buying the whole game. You can also play for 30 minutes as a free demo. They've worked to make it as easy as possible for people to try games and to buy them.

On the plus side, OnLive already has HD display, which the Wii doesn't. The low price point is great, also the fact that you don't have to worry about upgrading your system. Of course, you do have to worry about OnLive going away at some point and taking with it all the games you paid for... which is a problem Steam has faced for a while, until it got big enough that people didn't worry about its survivability.

One big question for me: Where's the marketing? No TV ad buy? Maybe I'm not seeing the ads because I'm not in the demographic they're targeting, but I'm not feeling the buzz. Are they just relying on PR to save the day, and take their growth organically rather than pour in some booster shots of marketing?

Keys to OnLive's future lies in two things: They need a large gaming library, the bigger the better, with the biggest hits; and they need to get a large installed base. Fail on either of those two things, and they're gone. Can they accomplish that before their funding runs out?

Meanwhile, David Perry's Gaikai is taking a different approach to cloud gaming. Here's a good summary of their approach; essentially they want to make it easy to embed a game anywhere on a web site, and then convert that to a paying customer. Rather, Gaikai gets paid by the game publisher to run the game, and then sales get routed however the deal has been cut.

Now Gaikai is about to enter open beta, and we'll see how well the model holds up in practice. Will they be able to get enough companies paying them to run games? Will users click on games and play them? It all sounds reasonable, but the beta will tell us much.

I think there are several factors working against cloud gaming. One is that momentum is with social gaming and mobile gaming, and the hardcore gamers are being pulled away by other entertainment options. These services are all about making hardcore gaming easier to get to... but is that really where the big audience is these days?

Another issue is the publishers. Do they really want to encourage digital distribution? If they do, do they risk a loss of revenue through traditional channels that won't be offset by the new channels? Will Microsoft sign up, or do they fear losing revenue from selling their consoles?

We are swimming in gaming more than ever before, with Facebook games and mobile games and Flash games as well as PC and console games. Are there just too many games around for these services to succeed? Was the demise of InstantAction a harbinger? Will these services take a chunk out of game industry sales or add to them?

I'm not sure what the answers are, but these companies deserve watching, and marketers need to be ready to act when the trends become clear.