Guy de Beer, the CEO of cloud gaming company Playcast, has suggested that OnLive has not been designed to ever become a self-contained games service, but has instead been created with the intention of selling the technology to an established player in the market – with Microsoft named as a possible suitor.

“In order to compete with the consoles, OnLive will have to build a distributed data centre which will be in every local network, invest serious money in network capacity and buy all the bandwidth to support it,” de Beer told TechRadar.

“The total investment in such a project is huge. The cost of rolling out a significant footprint in the US alone would be hundreds of millions of dollars. And the return? As superbly funded as OnLive may be, they are no match to compete with the Comcasts, Verizons and AT&Ts of this world. So are the OnLive people stupid?

“No, they're probably pretty smart – they want to develop this model sell it to someone bigger who may be able to find the business case to compete with the Comcasts and Verizons.

"Maybe someone like a company that starts with an M, ends with a T, is based in Redmond WA, and has been trying to build such a parallel private network for a product that starts with an X and ends with a Box?”