Game Disruption from the Cloud

OnLive microconsole and control

If you want to play a serious action game like a first person shooter with high quality graphics and fast action, chances are that you would go for a PS3, an Xbox 360 or even a Wii. These are the serious game consoles. You could also get a super fast PC with a powerful GPU. You buy these and install them at home. For games you buy disks or download the games from the manufacturers store. This is the traditional image of the world of hard-core gaming. Then image this. Instead of buying a powerful game hardware you buy a small device to connect to a screen and your internet connection. Then you use a powerful game ‘console’ located at a remote site and stream the image to the device and to the screen like a normal video signal. Games are now coming from the cloud and this can cause disruption in the traditional gaming market.

This is exactly what the company OnLive is doing. OnLive introduced its service at the GDC in San Francisco in March 2009. Games on Demand, or GoD if you will. The games are available through any PC or can be played using a micro-console, a pocket size device that hooks up to a screen. OnLive high-performance servers then compress and stream the content to the player’s TV. OnLive will offer the same games as available for the consoles.

Interesting thing is that OnLive started this development seven years ago, long before anybody was talking about cloud computing. Although the idea might seem plausible today, in 2002 it might need some serious convincing.

OnLive entrance to the market is a classic case of low-end disruption as described by the Disruptive Innovation Theory. It will challenge the traditional game console market and the retail distribution of games on discs.

There are few interesting things with this approach. First, you don’t need a big console or a powerful PC to play games. The computing is done remotely. A low-end computer, even the popular netbooks, is usable.

Secondly, it does not matter what type of computer you use. OnLive is independent of operating systems and computer types. As long as you have 1,5 Mbps or better internet connection, it can stream the video.

Thirdly, you don’t need to update your hardware to keep up with Moore’s law. New technologies go to the cloud, not your hardware.

Fourth, with games in the cloud there is no need for game versions. It seems that the new emerging model for gaming is to release a game, no particular version that needs to be updated a year later, but an experience that continuously evolves, keeping players constantly involved. The game doesn’t have to end. Gaming is moving from products to services where the business model is to pay for use.

Fifth, this is another prove of that the community is important. As social creatures, players want to play with other players and see what others are doing. This is one of the megatrends of our times.

On line games are not new. What is new is that OnLive brings high action, graphics oriented games without the need to own a high-end computer. But the question is how much disruption this will cause. Thinking of the lessons of history, the PC emerged since people wanted their own computer, hence the name Personal Computer. This is still a powerful force, owning and controlling your own stuff. But for most people, it just the games that count.  OnLive will be available later in 2009. It will be interesting to follow the disruption this will cause. This will make a good case study to my New Technology class in 2010.