Opinion: Where OnLive Went Wrong

The recent troubles of OnLive have brought the area of cloud gaming, something that’s been a little quiet since Sony’s purchase of Gaikai (on my birthday strangely enough), back to the forefront of the gaming community. Not only do OnLive’s issues raise questions about some of their business practices and decisions, something I’m not going to focus on here, but it means the whole area of cloud gaming needs to be looked at again.

The question, for me, is whether or not a cloud gaming service can survive by itself, or if it’s simply OnLive’s approach that was at fault? I mean OnLive’s attempt to create a new category of gaming device is certainly praiseworthy, but I’m not sure if the way in which they’ve done it is necessarily the best approach.

The problem is that people seem to have this all you can eat perception of streaming services, likely created by the video offerings of companies like Netflix and LoveFiLM, or Spotify’s unlimited music service. The success of these services does seem to show that people have a space in their life for media consumption where you don’t own the media, although earlier physical video rental (like Blockbuster) had already shown that people don’t need to own everything they watch.

[videoyoutube]Unfortunately for OnLive they didn’t go with the unlimited gaming approach from the off, although they were quick to introduce the Playpack which is probably as close to unlimited as the current model of video game licensing would allow them to get. In spite of the Playpack, OnLive always seemed to be more focussed on selling games, a much tougher proposition. However, given Steam’s success with a similar model, I think it really is the streaming aspect that makes OnLive a hard sell (at least as a games retail service).

Partly I suppose that’s due to the inherent technological challenges of streaming video, let alone an interactive streaming service. Personally if I’m only paying £6.99 a month, the currently listed price for the Playpack, I’m much more likely to be forgiving towards the service than if I have to pay for each game I want to play individually, despite the reduced prices that OnLive seems to offer.

The other mistake that OnLive made, and something they may have to address if they want the new incarnation of the company to survive, was attempting to make OnLive its own service. If they’d done what Gaikai did and partnered with other companies, before ultimately selling themselves to Sony, I can’t help but feel OnLive would have had a much better shot.

Trying to build their brand and their own identity was always going to be a tougher challenge than building themselves as part of say Xbox Live. Attempting to create a technology that could then be included in another platform may not have been as high profile or as “sexy”, but it may well have allowed them to build a more secure base for themselves.

Of course it’s worth remembering that this isn’t a eulogy for OnLive, the service still exists although the company has, obviously, changed drastically (and isn’t even the same entity). Maybe they’ll manage to change their business model in such a way that allows them to continue, or simply sell out to a bigger entity that can afford to support them.

I’m not sure their setback shows we’re not ready for cloud gaming though, merely that we’re not quite ready for cloud gaming as a distinct entity. I’m not sure we ever will be to be honest, but I hope someone manages to nail the formula for solo cloud success.


  1. maybe giving away a few thousand consoles at EGXP 11′ and wasting a fair amount of their budget before they’d launched might be a contributary..

  2. To be honest, the strengths of the service such as no downloads, patches or alleged lack of loading times are less and less of a concern with modern consoles. Admittedly I have fibre optic broadband so download speeds are pretty healthy, but being able to queue downloads, have patches automatically downloaded over night, and play games straight from your hard drive makes it even harder for a service like Onlive to have any impact or individual identity. Add in services like Playstationplus where you have a instant game collection (like the Onlive playpass but with better games) and its no wonder they’ve struggled.

  3. Cloud gaming is no different the any other video game system, if you’re going to have a successful launch you need exclusive games. Cloud gaming right now is just a more inconvenient way to offer the same thing. Just like movies, anybody who actually cares abbout the quality and experience of home theatre goes with Blu-ray, they don’t stream movies like ‘The Avengers’ from the internet.
    Cloud gaming is better suited for portable gaming, not home theatre style gaming, and the majority of AAA games are now being made to take advantage of theatre style gaming. There big, flashy, sound effect ridden blockbusters running in 1080p, why people would want to comprise that by streaming them is beyond me. As long as there’s the choice of physical or streaming people will always chose physical. OnLive failed and will fail again because they don’t have any games worth playing you can’t play somewhere else under better conditions. OnLive is a classic example of biting off more then they could chew and now they’re choking

  4. Advertising. They never did any advertising to the general public, I never saw a TV advert. Hardcore gamers don’t provide console companies with the majority of there income.

    Look at the Nintendo Wii, made a fortune from ordinary general public. Sony on the other hand, made a huge loss, because they aimed at hardcore gamers.

  5. i think the problem was, they believed their own hype.

    people just don’t want to buy something when it can be just taken away in an instant, if the company goes under, the servers could go down, i know there are lots of servers, but i assume there’s a central log in server somewhere, or your net connection could go down.

    some are annoying because you can’t play your purchased games through no fault of your own.
    but one sees you lose your purchases permanently, i would assume with no way to get either your games or your money.

    there is the sub option, but most of the best games aren’t featured in that sub, the only way to get those is buy buying them.
    or short term rentals of individual games.

    so i could only see most people taking the sub option.

    but then when they’ve, apparently, got 8,000 servers and 16,000 subscribers they’re in big trouble.

    and the service has insurmountable technical problems, as far as i can see.
    and unless they can crack that speed of light barrier they’re never going to solve them.

    the lag is simply unavoidable, unless they have so many servers that you’re never too far away from one of them, and too many servers and not enough customers already seems to be a problem.

    it’s only a fraction of a second, and in many games it’s really not an issue.
    i’ve played a couple of third person action games and didn’t notice a problem caused by lag.
    but for something like an fps where precise aim is an issue it can have a big impact.

    what you’re reacting to on the screen is that fraction of a second behind, so by the time you’ve stopped moving and you think your crosshair is over the target the game still has a few frames coming of you moving your aim, so they arrive and you see that you’ve overshot and go back, doing the same again, only less so because you’re not moving the mouse so fast.

    at least that was my experience.

    given how competitive those games can get it could mean the difference between life and death.

    i’ve tried the same game on disc on ps3 and xbox, and onlive, Deus Ex if you were wondering, and honestly i don’t think i could make it through the whole game with that lag.

    actually Deus Ex wasn’t on disc on ps3, it was a download, but that’s probably not relevant. ^_^

    anyway, i just don’t see streaming as a viable option for selling content, great for a flat rate service, but they need a better selection of games first.

    maybe an MMO publisher could partner with them so players can play their mmos with the best graphics.
    there are some MMOs i haven’t tried because i don’t think my pc can run them.
    and some i tried and don’t play anymore because it couldn’t.

    imagine if the sub to an mmo not only let you play the game but also allowed you to play it on an Onlive server with all the graphics options turned up to max.

    lag wouldn’t be such an issue with an MMO either.

  6. 2 things went wrong for me

    1) Gamers… There’s some very archaic views out there where a very vocal minority preach that a sense of ownership of a physical product is paramount, that view dims over time as digital distribution has become more & more popular way for people to buy their games, but streaming was a step to far.

    b) Digital music’s Apple/iTunes effect, by this I mean content producers being worried about one company being gatekeeper & marketplace to a whole distribution channel. I think they withheld their products because OnLive had a real chance of working & if it worked en masse publishers would have have been beholden to OnLive’s business model & fees.

    iii) Publishers also didn’t want margins being eroded on their existing sales so it was always going to be limited as to what they’d allow to be included in a subscription.

    • I don’t think wanting to own something physically should be held against anyone, physically owning something is a lot more secure than a “license” that is purchased through steam. While I appreciate the convenience of purely digital software I think there will always be a place for (perhaps limited amounts) of physical software.

      For example look at the current popularity of Vinyl Records, CDs are alot more convenient and portable (Let alone Mp3s) yet there is a thriving niche market for Vinyl.

  7. I also believe they would have been better off not just focusing on OnLive but to share their tech with other partners like Gaikai have done. I would bet the new company will be more receptive to that idea. They’ll certainly need to do something, they can’t just continue with the ‘8000 servers’ to ‘1600 concurrent users’ ratio.
    Mind you, Steve Perlman has 100 patents and apparently at least one of those is fundamental to cloud gaming. There are probably some nervous Sony execs poring over those patents right now..

  8. I tried onlive using my pc and while it works ok, the graphics are fuzzy when compaired to pc,ps3 and 360 games……it’s a great idea but the tech isn’t quite there yet.

  9. My internets not fast or reliable enough, it’s as simple as that! I’m pretty sure a good percentage of Brits are in the same boat, not all of us can afford or even get 10Mb+, OnLive need to recognise that as a significant limiter on their market.

  10. There’s simply no way I could stream a HD game on my connection, pure and simple.
    I can’t even do that with a YouTube clip without it buffering.
    Come back in 10 years when hopefully Ireland has some money, and it’s been spent on broadband rather than pocketed by politicians.

    Fat chance.

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