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Rising From the Ashes: The Death and Rebirth of OnLive

By Kathy_McGraw08-03-2014

When Steve Perlman announced OnLive, a new videogame streaming service at the Game Developers Conference in 2009, he set the tech world on fire. Imagine the ability to play any game, at 720p, with 60 FPS, so long as you could connect to the Internet. At the time, it was revolutionary.

It still is.Although the initial beta testing was not without its troubles, the company had high hopes for success when it officially launched in June 2010. The streaming service cost users $14.95 per month, in addition to the game price.

During its first two years, OnLive launched product after product. In November 2010, the MicroConsole came out, which allowed users to play games on their televisions for a fraction of the cost of the latest consoles. In September 2011, it launched service in the UK by airlifting in the servers at great expense. In addition to all of this, OnLive launched mobile apps for Android users by December 2011.

OnLive was running a massive operation of more than 8000 servers, with a peak daily user number of 1800, although 1600 is probably closer to the mark. Its monthly operating costs were $5 million, and it simply did not have the user base to maintain itself, let alone make a profit. In August 2012, Perlman sold the company to investor, Gary Lauder, and OnLive entered into an Assignment of Benefits to Creditors, or ABC, a procedure under California Law that is similar to bankruptcy, but does not require an expensive Court hearing.

It seems that a lot of the blame for OnLive's failure may rest with Perlman himself. The Verge.com reports that Perlman's rivalry with David Perry, the CEO of Gaikai, another company offering a similar service, cost OnLive contracts with large publishers. According to The Verge sources, OnLive had a deal with EA to have some of its titles in its library at launch. When Gaikai announced that it also had a contract with EA, Perlman pulled all of EA's titles from OnLive's service. If Gaikai got the title first, Perlman wanted no part of it. Another game that OnLive could have had on launch was CD Projeckt's The Witcher 2, but since Gaikai had it also, Perlman nixed it.

Aside from Perlman's idiosyncrasies, another major problem OnLive had was that publishers were demanding close to retail price for their games. Understandably, gamers did not want to pay $60 for the same game twice, nor did they want to pay retail for a game they couldn't be sure they even owned.

Lauder saw the potential in his new company, but he knew that it needed a new business model if he wanted a return on his investment. On March 5, 2014, he announced OnLive's new direction with a new CEO, former IGN head, Mark Jung, and two new services, Cloudlift and OnLive Go.

Through a partnership with Steam, Cloudlift lets users access games from their Steam library on any device, and anywhere that there is an Internet connection. As of this writing, there are only about 20 titles available, including Batman: Arkham City and Saints Row IV. OnLive continues to pursue contracts with other publishers to bring more games on-board. Since it syncs with the user's Steam library, there is no need to buy games through OnLive itself. The streaming service costs $14.99 per month.

OnLive Go is a service that lets you play MMORPGs anywhere, and also allows you to play a cloud version while the game downloads in the background. Though right now, the only game available is Second Life. OnLive's original Netflix-like service is still working, and lets you play the older titles in its catalog for $9.99 a month.

Although it appears that it has rebooted itself, OnLive still isn't without problems. Currently, it works best on Internet connections of 2mbps or more. While it will work well over most home networks, it won't work as well on devices operating on the 4G network, such as mobile phones and tablets. Also, the current selection of games is still quite limited.


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You know, I actually kinda' hope they make it work this time. The idea itself, if it has the chance to get its feet (Steam will definitely help with that) has a hell of a lot of potential. Even if it's mostly used by people who buy the odd month here and there, when they're on holiday or don't have their own rig for some other reason. I can most definitely see the advantages of playing anywhere, on anything